Apple has witnessed a substantial surge in the sales of its reconditioned/refurbished iPhones, reinforcing its supremacy in the worldwide market for restored and repackaged smartphones. The Cupertino-based tech giant observed a two-digit increase in the sales of these devices in 2022.
The market for refurbished iPhones experienced a significant surge in demand in the past year. The growth was so remarkable that retailers faced challenges in acquiring used devices for resale. This trend further underscores Apple’s strong hold on the global market for returned and repackaged smartphones.
Counterpoint Research has reported that there has been a significant increase in the demand for refurbished iPhones, which grew by 16% in 2022. The demand for refurbished smartphones has been fueled by four key factors, while the supply is currently limited by the trend of consumers holding onto their phones for longer periods of time. As a result, the global secondary smartphone market has grown 5% year-over-year, according to Counterpoint Research’s Global Refurb Smartphone Tracker.
Apple’s refurbished sales grew 16% in 2022, increasing its share in the secondary market to over 49%. Apple is now the fastest-growing brand in the used and refurbished smartphone sectors worldwide. This growth in the secondary market is having an impact on the sales of new iPhones and service revenues in many markets. In fact, Apple is now a significant contributor to the growing share of refurbished smartphones as compared to new smartphone shipments in main markets. The shortage of supply is mainly felt for iPhones in refurbished markets.
According to Counterpoint Research, in 2022, there was a slight shift of Android users to iOS, which had an impact on the sales of Samsung refurbished phones. Despite the growth in demand for refurbished smartphones, Samsung was not able to capitalize on this trend, as the company’s share in the refurbished smartphone market decreased from 28% in 2021 to 26% in 2022.
India has emerged as the largest market for refurbished smartphones in 2022, mainly due to China experiencing a 17% decline in the sales of refurbished phones in the same year. The report also revealed that most emerging markets witnessed limited supply of refurbished devices, as consumers are holding onto their new smartphones for longer periods.
Apple’s refurbished iPhones are meticulously refurbished and brought up to the company’s high standards. Each iPhone goes through a rigorous refurbishment process that includes the installation of a new battery, outer shell, and USB-C to Lightning cable, making them almost indistinguishable from new iPhones. These devices are also unlocked, which means they can be used with any carrier.
The popularity of refurbished iPhones is further driven by Apple’s warranty policy, which provides a full one-year AppleCare+ coverage for batteries and outer shell repairs. This policy, coupled with the option to purchase extended AppleCare+ coverage, adds an extra layer of trust for consumers looking to buy pre-owned devices.
The market intelligence company points out that the growth of the refurbished smartphone market could have been even higher, had it not been for the COVID-19 pandemic and its impact on falling sales in China.
Counterpoint Research suggests that the rise in sales of refurbished iPhones, while positive for Apple’s revenue from services/subscriptions, has had a negative impact on the sales of new smartphones from the company. This may be due to consumers opting to buy refurbished iPhones instead of purchasing new ones, leading to a decline in Apple’s new smartphone sales.
Despite losing its share in the refurbished smartphone market, Samsung still holds a significant lead over other Android smartphone manufacturers. According to Counterpoint Research, Oppo and Vivo hold only a 3% share each, while Huawei lags behind with a meager 2%. All other brands collectively contribute just 17% to the refurbished smartphone market.
According to the market tracker, the demand for 5G refurbished smartphones is expected to increase even more in the current year, as the resale value of 4G phones starts to decline rapidly. This is because consumers are looking for faster and more advanced technology, leading to a higher demand for 5G-enabled refurbished devices.