We are excited to share with you our expanded trends report coverage. Our quarterly reports now include data on devices turned in through Upgrade programs as well as Trade-in programs. This is reflected in the Top 5 Devices Received and Average Age of Device metrics. Other metrics, such as average trade-in value and money in consumers hands are based solely on Trade-in. We hope you find our quarterly report even more valuable.
Upgrading To 5G
Contributing to a more sustainable future is good stewardship and should be a priority for every company and consumer. Management of the lifecycle of the mobile device can be a tool to achieving sustainability goals. Sustainable practices are not only good for the environment, but they can also enhance a company’s brand reputation and bottom line. Global Wireless Solutions, 76% of consumers are either 'very interested' or 'somewhat interested' in 5G innovation. Given the current upgrade supercycle, we expect both the global smartphone and secondary device markets to continue to grow.
Device Trade-in programs are utilized by many of the world's largest carriers, OEMs, retailers, and cable operators to unlock the latent value devices hold as part of a lucrative circular economy. Our data shows that in Q1 2021, consumers received on average $192 for an iPhone and $96 for an Android when traded in. This monetary incentive makes a real difference in the purchase of a new 5G device. Altogether, Trade-in programs returned $668 million to consumers, increasing by 25% over Q1 2020.
Trade-in and Upgrade Program Impact
Apple iPhones continue to dominate the Trade-in and Upgrade market. We saw strong iPhone activity in 4Q 2020 when Apple introduced their line-up of 5G devices, and we continue to see that trend. The top devices received through Trade-in and Upgrade programs in Q1 were the iPhone XR followed by the iPhone 8, iPhone 8 Plus, iPhone X, and iPhone 7. The Samsung Galaxy S9 was the top Android device as it has been for the last three quarters.
The average age of a smartphone at trade-in is 3.15 years, with iPhones being about 3.29 years and Androids being about 2.77 years. We witnessed the average age go north of three years almost two years ago, and it has steadily increased since. While it’s great that mobile devices are enjoying longer lives than ever before, it’s important to remember that smartphones, much like cars, are depreciating assets and trade-in value decreases as time goes on.
Timing Is Everything
It is up to carriers, retailers, OEMs, and cable operators to help consumers find the perfect time for a trade-in. Deals can be presented to maximize trade-in value and maintain a steady supply for the secondary market. Utilizing Assurant’s Device IQ allows those with Trade-in programs to better determine what the pre-owned devices will sell for in the wholesale market. This is also true for Upgrade programs. Predicting the future wholesale value of a device after one, two, or even three years of ownership allows these sellers to better formulate their Upgrade program to ensure they are not taking a financial risk when the consumer returns the device. Building your win-win Trade-in and Upgrade programs means understanding the economics and dynamics of the secondary market.
5G is a game-changer for Trade-in and Upgrade programs. Consumers have been waiting for the innovation that 5G brings. Creating compelling 5G offers and using Trade-in and Upgrade programs as a vehicle to attract new customers will be vital to driving new device sales.
If you want to learn more about the mobile device trade-in and upgrade trends from Q1 2021, check out our latest quarterly infographic.