About 7.5 % of all smartphone sales last year were used smartphone, second-hand smartphones. Deloitte counts the market at 120 million units in 2016, up from 80 million the year before. While the total new smartphone sales were essentially flat for year 2016 vs 2015 (we'll know in a few weeks when the final numbers are out, could be up or down about one percent) there WAS growth in actual purchases of smartphones last year, vs 2015. That was driven by the used-phone market. The second-hand smartphone market grew by 50% compared to year 2015. Deloitte counted 80 million total second-hand smartphone sales in 2015 and now 120 million in 2016 (ie 50% growth year-on-year). Seeking Alpha has the article relating to Deloitte's count. If the global new sales smartphone market was exactly flat, at about 1.5 Billion smartphones sold last year, then the used market helped nudge the total market to an annual growth rate of 2.5%. And 120 million handset sales per year is nothing to sneeze at. Its more than total digital camera sales (and every used smartphone has a camera) and its about the same number as total desktop PC sales (this year 2017, used smartphone sales will be greater than total new desktop PC sales). And obviously, every smartphone, even if used, can do Facebook and Google and go to Amazon to do some e-commerce.
Now why is there this market and how do phones 'get' into the second-hand market. A part of that is the intake of old phones when phones are replaced. Old phones are then refurbished at the factory and if you get a warranty replacement phone for your phone, that is likely going to be a refurbished unit, not a new phone. But its a small part of the total business. We get some interesting numbers from Australia. A fresh study by Finder.com.au reported at Finder.com has measured the various ways that Australians get rid of their older smartphones. I would think these are 'indicative' and reflect typical behavior in most mature smartphone markets where new sales of smartphones are in the 90% of all phones sold stage (countries like Hong Kong, UAE, Australia, Singapore, the Scandinavian countries etc) and most owners are typically on their third or fourth smartphone already. So compared to the USA, this is like a snapshot about 2-3 years into the future.
In Australia, 33% of old smartphones are kept by the owner but forgotten. 24% of Australians will hand their old phone to a relative of friend as a hand-me-down phone. 18% will recycle the smartphone. 9% will sell the smartphone at eBay or hand it in at the store for credit when replacing. And 6% will toss the old phone out with the rubbish. Then there is the miscellaneous last 10% that would include broken phones, lost phones, eaten-by-sharks phones, eaten-by-Crocodiles phones (its Australia, after all), The kangaroo-stole-my-phone, phones; bitten by-poisonous-spider phones, carried away by huge vicious man-eating poisonous-insects phones etc. But yeah, 69% of Australians will replace their smartphone 'prematurely' well before their old phone would not meet their current needs. This too would be a typical global phenomenon in leading countries (something we observed in Hong Kong and Japan years ago).
Where do the used smartphones end up? Mostly in less developed countries. There are huge second-hand-phone markets in most major shopping centers in the Emerging World that are stocked with miles and miles of Samsungs, iPhones and haha, yeah, still tons and tons of Nokias. The local brands will be there of course but even the typical 'top 10' brands we look at on this blog, the LGs, Huaweis and Lenovos, or the previous ones like SonyEricssons, Blackberrys and HTCs, are far less prominent. They depend on the local market success in that given country.
So now we have some numbers. 120 million unit sales in 2016 were second-hand used smartphones globally. When we add it to the approx 1.5B we get total smartphone market (new and used) of 1.62B (roughly) and thus used smartphones would account for 7.5% of the total smartphone market worldwide. As we have a replacement cycle that is growing longer, Citigroup reported the handset replacement cycle in 2016 had stretched to 29.6 months, so when we go back 30 months from mid-2016 (end of June 2016, half-point of year 2016), we see the sales of smartphones was 990 million (12 months to December 2013). So out of phones sold in year 2013, 12% (120 million) turned up as second-hand-phones (on average life expectancy) in 2016. That is not far from the 9% that the Australian study reported, that old phones are sold, especially, if we also account for the relative phones (24%) ALSO probably being then sold on eBay after their life, which gets us to 11%... Not bad. I like it when the math comes together. Of course I've been reporting on the used smartphone market for ages on this blog and in my publications. But its nice to see some others also report some numbers relating to this, quite relevant aspect of the total handset market and a growing slice of the global smartphone market.
Now if you need ALL the numbers on the handset market, new and used, smartphones and dumbphones, my brand new TomiAhonen Phone Book 2016 edition just was released exactly one month ago, with all stats current to December 2016. It only costs 9.99 Euros so it will not bankrupt you. See the table of contents and get your Phone Book 2016 here.