The significant role trade-in and upgrade programmes are playing in the move to 5G has been revealed in the latest quarterly study from Assurant, showing that the level of trade-ins for 2021 even surpassed pre-pandemic levels.
Assurant’s Annual trade-in and upgrade industry trends report is designed to provide insights into trade-in and upgrade trends in North America. Using data from Assurant’s Device IQ analytics platform, as well as industry market data, the report identifies the top smartphones and wearables turned in through trade-in and upgrade programmes during the quarter, as well as the average age and value of devices at trade-in and upgrade.
For 2021, the study found that as much as $3.1bn was returned to US consumers in 2021 through mobile device trade-in and upgrade programmes. This was almost $1bn more than the $2.1bn returned in 2020, and even exceeds pre-pandemic levels of $2.4bn in 2019.
Assurant also showed that 2021’s trade-in market ended the year on a strong note, with $1.1bn returned to US consumers via trade-in and upgrade programmes in Q4 2021, a 40% increase from $757m in Q3 2021, and a 34% year-on-year increase. In addition, there was a 220% increase in online trade-ins from Q4 to Q3 2021 and a 42% increase compared with Q4 2020.
5G device demand was at the heart of this spike. Noting consumer adoption of 5G was reliant on commercially available 5G devices, Assurant cited recent research by the Global Mobile Suppliers Association (GSA), showing that more than 850 5G-enabled models were commercially available by the end of 2021. Programmes that made upgrading to these devices more attractive and affordable were found to be making a significant impact on the market.
In terms of specific devices that were being traded in, the study showed iPhones continued to lead the top five devices turned in through trade-in and upgrade programmes in 2021. Showing the evolution of the trade-in market compared with previous quarters, the top-traded devices of the year were the iPhone XR, iPhone 11, iPhone 8, iPhone 8 Plus and iPhone X. The iPhone XR was the top turned-in device for the fourth consecutive quarter and, in Q4, made up 33% of the top five traded devices. The Samsung Galaxy S9 was the top traded Android device of 2021.
The average trade-in value for an iPhone in 2021 was $199, while the average trade-in value for an Android smartphone was $98. Overall, the average value of a smartphone at trade-in was $140, a 13% increase from $124 in 2020.
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For Q4 specifically, the average age of devices at trade-in decreased in the fourth quarter, a trend typically seen at this time of year. In Q3 2021, iPhones were on average 3.39 years and Androids were 3.08 years at trade-in; in Q4 2021, iPhones were 3.36 years at trade-in and Android devices were 2.96 years.
However, Assurant noted an anomaly in the Q4 average trade-in value for devices, which it said saw an “unusual” dip of 10% compared with Q3 2021. The average trade-in value of a smartphone in Q4 was $136, compared with $150 in Q3.
“Q4 is traditionally a strong quarter for trade-ins and upgrades thanks to new smartphone releases, sales periods like Black Friday and Cyber Monday, along with holiday shopping,” said Biju Nair, executive vice-president and president of global connected living at Assurant, commenting on the research.
“Remarkably, this past Q4 saw trade-ins and upgrades skyrocket – putting more than $1bn into US consumers’ pockets – and contributed to a record-breaking year, which is truly incredible and shows just how important trade-in and upgrade programmes are to move consumers to 5G.
“Many operators, OEMs, retailers and cable companies run trade-in and upgrade promotions to encourage the move to 5G, and these incentives are clearly working. We also see more consumers making their trade-ins online, which is undoubtedly providing a boost to the overall trade-in metrics. And, for additional trade-in convenience, we have enabled capabilities like ‘take home-trade later’, which allows consumers to purchase a device in-store and trade in their older devices from home later.”