Hand-me-down smartphones getting a new lease on life

Are you one of those smartphone users quick to dump your handset when something shiny and new comes along? New research shows you’re in the majority, and you’re also helping to fuel a thriving market for refurbished smartphones.

A recent Gartner Inc. survey of consumers in the U.S. and Germany found that 60 per cent of consumers replacing their smartphones either wanted additional functionality or just wanted a new device. Their old smartphones are still perfectly functional, and the thirst of these consumers for the latest and greatest is fueling a worldwide market for refurbished phones sold to end users that is forecast to reach 120 million units by 2017, worth about $14 billion. That’s up from 56 million units worth $7 billion in 2014.

“With consumers in mature markets upgrading their smartphones every 18 to 20 months the inevitable question is what happens to the old device?” said Meike Escherich, principal research analyst at Gartner, in a statement. “While only seven per cent of smartphones end up in official recycling programs, 64 per cent get a second lease of life with 23 per cent being handed down to other users and 41 per cent being traded in or sold privately.”

This secondary market will likely have an impact on new smartphone sales, particularly at the lower end of the market, as consumers not looking for the newest, most feature-rich device consider a gently-used model rather than a new low end device. In fact, the gently-used model could be more feature-rich than the newer phones available at a similar pricepoint.

As this market grows in performance, the regular smartphone upgraders may even begin to feel the love from smartphone vendors.

“The growing number of privately sold phones will stir up competition in the take-back market and drive communications services providers and refurbishers to engage in more aggressive marketing campaigns and new incentives,” said Escherich.

The most aggressive upgraders are the tech enthusiasts, described as early adopters and trendsetters, so constitute about 25 per cent of respondents. Of that group, 53 per cent said they planned to get a new smartphone within the next 12 months while 56 per cent said their current phone was less than 12 months old. And nearly half said they’d upgrade for new features or functionalities not in their current smartphones.

This is the group of most interest to the hardware vendors.

“Tech enthusiasts tend to show high brand loyalty, indicating a good probability for future purchases of the same brand — with the extra credit earned via trade-ins often used for upgrades on their new purchases,” said Escherich.

How often do you replace your smartphone? Do you stay loyal to one brand? And what do you do with your old smartphones? Let us know in the comments.

Mine are gathering dust in my kitchen drawer.

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Jim Love, Chief Content Officer, IT World Canada

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Jeff Jedras
Jeff Jedras
Jeff Jedras is a technology journalist with IT World Canada and a member of the IT Business team. He began his career in technology journalism in the late 1990s, covering the Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada and the channel for Computer Dealer News. His writing has also appeared in the Vancouver Sun & the Ottawa Citizen.

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