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What Did the Holidays Do for the Secondary Smartphone Market?

Posted by Sanida Bratt on Jan 20, 2017 1:10:00 PM

secondary smartphone market trendsBetween Q4 2015 and Q3 2016, the smartphone buyback programs returned $2 billion to consumers

But it should come as no surprise that this past holiday season (Q4 2016) put the secondary market on pace to exceed that value.

Last quarter, $710 million was put in U.S. customer hands as the result of mobile phone buyback/trade-in programs.

Although trade-in data from the holiday season didn’t shatter any expectations after the 2016 year in review, it’s interesting to see how we ended up at $710 million and what the distribution means for both the primary and secondary smartphone markets.

The Market Has Spoken—Bigger Smartphones Are Better

Tweet: The most interesting stat from our Q4 2016 analysis >> https://ctt.ec/5_f8N+ #mobiledevice #tradeinPerhaps the most interesting stat from our analysis of Q4 2016, is the massive gap within the top 5 traded devices.  

As expected, numerous iPhones dominated North American trade ins. However, the iPhone 6 ran away with total number of units traded. During the 2016 holiday season, the iPhone 6 was involved in 22.49% of all mobile device trade-ins, compared to just 8.12% for the iPhone 6 Plus.

Secondary Smartphone Market Q4 2016The release of iPhone 6 and iPhone 6 Plus in 2014 marked the first time Apple embraced demands for a “phablet.”

If phablet seems like an old term, it’s because we’ve become so accustomed to big-screen smartphones that a 5.5” display is just normal—we don’t need a term for it.

And yet, the smaller-screen iPhone 6 sold better that year and again when the update released in September 2015. In fact, the release of iPhone 7 and iPhone 7 Plus was the first time that the “phablet” iteration was the best seller—and the secondary market is reflecting it.

Tweet: In Q4 2016, the #iPhone6 was the clear leader in #mobiledevices trade >> https://ctt.ec/u6Fef+ #smartphonesDespite not having one of the highest trade-in values, the iPhone 6 was the clear leader in units traded for two reasons.


First, many consumers still stick to upgrading along the major iPhone release cycles (as opposed to the “S” minor releases).

But most importantly, in terms of market demand, it’s clear that consumers are trending toward larger phones and the iPhone 6’s 4.7” screen just isn’t cutting it anymore—not to mention the fact that upgrading to the iPhone 7 Plus gives users a Full HD display.

<< Download the Q1 2017 Mobile Trade-in Infographic >>

Even though the highest traded-in Android phone was the Galaxy S5 (12.09% of all trade-ins), the value of a secondary Galaxy S7 Edge ($252) and Moto Z Force Droid ($280) support the notion that bigger smartphones are better. The secondary market must prepare accordingly.

Standard Contracts Are Still Being Phased Out by Leasing Programs

It should come as no surprise at this point that two-year contracts are technically no longer available from the major carriers (we might be sliding back to carrier subsidy models, but that’s a different story). 

However, at this time last year leasing had barely overtaken standard contracts as the primary means of obtaining a new device (a 51%/49% split). In Q4 2016, leasing now accounts for 70% of payment options compared to just 30% standard contracts.

Smartphone Leasing vs. Contracts

These leasing options have given rise to widespread programs allowing consumers to keep up with every iteration of the iPhone. While the two-year cycle dominated Q4 2016, it will be interesting to see how the secondary market is affected as consumers start to trade in year-old devices and the price slashing begins.  

Regardless of the specific trends each quarter, one thing is clear—the secondary smartphone market is on the rise. If you want some help getting your trade-in program into its more effective form, download our free white paper, 15 Steps to Creating an Efficient Mobile Trade-In Program.

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