Mobile trade-in programmes return over $2bn to US consumers in 2019

Further evidence has emerged of the value of used smartphones, with a survey from HYLA Mobile showing that as much as $2.378bn was returned to US consumers in 2019 via mobile device trade-in programmes, an increase of 4.7% on the previous year.

The report from the provider of software technology and services for mobile device returns management combines live market figures and the company’s own analytics solution to identify the latest trends for the pre-owned mobile device market in North America.

“Year on year, our data shows the growth of mobile device trade-in programmes, and how these programmes help give billions of dollars back to US consumers for their seemingly old and unwanted devices,” said Biju Nair, president and CEO of HYLA Mobile.

“Trade-in programmes are a great incentive that operators, OEMs and retailers can use to entice their customers to upgrade to the latest device. While we continue to see the growth of these programmes year on year, we’re yet to see a gap in consumer awareness of such programmes resulting in them not availing of trade-in opportunities.”

Further to this, research from IDC in January 2020 calculated that shipments of used smartphones, inclusive of both officially refurbished and used smartphones, reached a total of 206.7 million units in 2019, representing annual growth of 17.6%. The study projects that used smartphone shipments will reach 332.9 million units by 2023, with a compound annual growth rate (CAGR) of 13.6% from 2018 to that year.

The HYLA’s 2019 trade-in trends report revealed that in 2019 the average age of a smartphone at trade-in was three years. Perhaps not surprisingly, iPhones accounted for nine of the top 10 devices traded in in 2019, with the top Apple device being iPhone 7, followed by iPhone 6s, iPhone 7 Plus, iPhone 6, iPhone 8 Plus, iPhone 6s Plus, iPhone 8, Samsung Galaxy S7, iPhone X and iPhone SE. The iPhone 7 was the top traded device in every quarter of 2019, and the Galaxy S7 was the top traded Android device in each quarter of 2019.

While the average age of an iPhone at trade-in was 3.1 years, the average age of an Android device at trade-in was 2.75 years. Overall, the average age of a smartphone at trade-in has crossed the three-year threshold. Q4 2019, where $758m was returned to US consumers, was the quarter where the most money was given back to consumers thanks to trade-in programmes.

The average trade-in value for an iPhone in 2019 was $171.11, while the average trade-in value for an Android smartphone was $66.82. Overall, the average value of a device at trade-in was $102.25. The iPhone 11 Pro Max received the highest trade-in value in 2019 at $560.55, and the iPhone XS Max followed with a trade-in value of $521.74. Interestingly, the highest trade-in value for a 5G device (the Galaxy Note10+ 5G) was 437.15, over $100 less than the iPhone 11 Pro Max.

The IDC report also noted that the deployment of 5G networks will likely heavily impact the used device market, as smartphone owners begin to trade in their unwanted 4G smartphones for 5G devices. In this regard, HYLA noted that despite years of preparation for the next generation network, there was still only a small number of 5G devices available. Indeed, a recent survey from Strategy Analytics found that more than 70% of the global 5G device market was dominated by Huawei and Samsung alone.

Looking at the potential of 5G to boost the used market, Nair said that incentivising consumers to upgrade to these new devices by trading in their pre-owned ones will make the transition to 5G much more affordable. “In 2020, we expect to see more 5G devices hit the shelves with more mainstream launches by market leaders like Apple and Samsung.”

“While we are unsure how much the new Apple 5G iPhone will cost, operators, retailers and OEMs should be encouraging consumers to upgrade sooner rather than later,” he said. “Currently, consumers are waiting three years before they trade-in and upgrade, where the average credit received is around $100 – which isn’t enough to make a significant contribution towards a new 5G device.

“But our data shows that by trading in a newer device, like an iPhone 11 Pro Max, they could take over $550 off the cost of a new device, making it a much more affordable,” said Nair.