The market for refurbished mobile phones continues to grow. It is a business that is based on the sale of second-hand devices that can look like new after receiving a screen change, a renewed battery and being thoroughly cleaned by specialized companies. These put them back into circulation with two or three years of guarantee and a price that can lead to a reduction of up to 70% compared to the new model. There are refurbished phones of all brands, but there is one that is sweeping the rest in this sector: Apple.
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Further
iPhones usually move between 15% and 18% of the total sales of new smartphones in the world for years, according to data from Counterpoint, the reference consultancy in this sector. Only during Christmas does its market share exceed 20%, reaching a peak of 23% during the festive period of 2023. In the reconditioned sector, however, its presence skyrockets: half of the phones of this type that are sold in the world are iPhone.
“Everyone wants Apple”, reveals to this medium Nathanael Berbessou, general director for Spain and France of Back Market, the largest online sales platform for refurbished devices. “It is a brand that has managed to create a product of the highest quality but also highly desirable, which positions you socially,” he explains.
That phone-shaped status symbol comes at a price. High. “The price of the new iPhone models is well over 1,000 euros and people are looking for alternatives,” says Berbessou: “Either buy the SE model, which is the cheapest of all when you buy new, or opt for the refurbished one, which is a way of accessing the same product for half the price”. Better a refurbished iPhone than other brand new ones, think a growing number of consumers.
The Counterpoint analysis data points in the same direction. “Research shows that consumers prefer a lower cost even if they have to deal with a little more imperfection in the device,” their report states. The sales platforms for this type of device usually have several categories depending on their condition, which also influences their price: like new (indistinguishable from a brand new one even in a thorough review), very good (damages not noticeable to the naked eye) , good (some visible scratches outside the screen) or fair (clear signs of use that do not affect usability).
apple-reliance
The refurbished market grew 5% globally in 2022. That’s a higher number than it sounds when you consider that in China, the largest global market, it fell 16% due to coronavirus restrictions. Berbessou, from Back Market, states that his statistics indicate that “one in five phones sold online in Spain is refurbished.” Certideal, another of the reference platforms, publishes a barometer that says that 58% of Spaniards “are interested” in buying a refurbished smartphone.
The specialized companies in this sector point out that the reasons for this growth are not only based on price. Also in greater environmental awareness, since in general reconditioning helps extend the life of the device and implies a lower carbon footprint than buying a new model.
Despite the fact that it is a business that contributes to the alleged circular economy in a particularly polluting sector, a good part of its future depends on Apple continuing to tolerate this secondary market. “On the phone maker side, apart from Apple, it’s very difficult to make the economy work on reselling certified pre-owned devices,” says Counterpoint’s analysis.
The high price of new Apple phones isn’t just a lure for potential refurbished buyers. It’s also a huge advantage for reconditioning companies because it allows them to work with higher margins. “It is true that for this to make sense, for this industry to develop, we have to recondition products that have a high value”, admits Berbessou: “Reconditioning a product obviously has a cost. And if we’re talking about a 150-euro smartphone, it’s difficult to find the economic space for reconditioning to be profitable for you”.
“This also explains why Apple gets the lion’s share of the pie,” he adds.
Control the market by selling only high-end
With the exception of the iPhone SE, a lower-cost model (559 euros, currently) and with an outdated appearance compared to those that belong to the brand’s numerical series, all Apple phones point to the high-end. A segment in which their phones have little competition.
The high-end covers less than 20% of total sales, according to Counterpoint data. The refurbished market, however, allows you to introduce your phones outside of this segment. A situation that benefits you since you can introduce new users to your proprietary ecosystem, designed to encourage buyers to only use brand devices.
Where do the phones come from?
With such high demand, are the phones of those who switch to the new iPhone model every year enough to supply it? According to Berbessou, yes: “A good part of the supply chain is local. What many of the people who buy the new iPhones do is take advantage of the exchange programs for their old device to reduce the price, something that you can do through Apple but also from most department stores or your own operator.
The rest, details the person in charge of Back Market, comes from the United States. “It is a very consumer market and there the habit of changing mobile phones every year is very present. Plans in which the operator offers you a free change every year or every 18 months are also very common. After that time, your own operator changes your mobile and this generates a huge flow of devices that are almost new ”, he concludes.
