Maksym Yemelyanov - Fotolia

Used smartphones worth $17bn to global economy, say accountants

Deloitte’s technology, media and telecoms practice suggests there is now a vast market for used smartphones

Consumers will sell or trade-in 120 million used smartphones around the world in 2016, fuelling a market worth more than $17bn (£11.7bn), according to professional services firm Deloitte.

The firm’s technology, media and telecoms practice said the average value of a used smartphone was about $140 (£96) per unit globally, $165 (£114) in the UK, with a number of models, notably the iPhone 6, holding their value very well.

While a number of services now exist to allow users to trade-in or recycle their old smartphones when they upgrade, anecdotally many consumers still tend to hide disused devices away in a drawer. Gartner statistics released in August 2015 also seem to suggest that the smartphone market is growing much more sluggishly, with asset sweating possibly at the root of the slowdown.

However, according to Deloitte telecommunications lead Ed Marsden, the second life of the smartphone should be increasingly important to the industry.

“There is an innate consumer desire to upgrade in order to have the most personal and useful devices,” said Marsden. “Savvy teenagers may urge their parents to upgrade their handset in the hope that they will, in turn, benefit from an upgraded hand-me-down.

“The growth of the second-hand smartphone market presents huge opportunities for the sector.”

Also, smartphone devices contain large amounts of metals and plastics that can be recycled, increasingly scarce rare earth elements – mostly mined in China – and minerals such as lead that are toxic if disposed of incorrectly.

Deloitte highlighted the second-hand smartphone market as just one of a number of trends it believes will affect the telecoms and broadband sectors in 2016.

Read more about 2016 trends

Among its predictions is the continued growth in gigabit (Gbps) internet connections, which it expects to top 10 million this year, up 10 times on 2015, with 70% of those expected to be residential connections. It forecasts that 250 million people will have access to networks capable of delivering 1Gbps speeds by the end of 2016.

“Evolving usage patterns and increasing demand for greater bandwidth may accelerate the supply of gigabit internet further,” said Marsden. “Video streaming in 4K resolution will be a key driver for improved data connectivity speeds in the coming years.”

Photo-sharing will also be a huge data sink, said Deloitte, with 2.5 trillion images expected to be shared or stored online this year, generating 3.5 exabytes, or 3.5 billion GB of traffic crossing networks worldwide.

Deloitte said more mobile network operators (MNOs) would debut voice over Wi-Fi (VoWi-Fi or VoWLAN) and voice over LTE (VoLTE) services in 2016, with 300 million customers expected to be using such services by the end of the year – five times more than at the start of 2015.

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Sure, I'd say there's been a vast market for smartphones since there have been smartphones! I have never owned a new smartphone. I buy them used, avoid the contract plans, and save a ton of money. 
I typically buy a new (but not newest model) and use it for 3-4 years.
I noticed that service providers (at least, those I dealt with in Canada) push the consumers to own the latest devices even by restricting the plans by device model and year.
When I smashed (not "cracked" mind you, I said SMASHED) the glass on my personal phone, the repair would have cost well north of $200. I bought a new phone instead, then sold the old, scratched, barely working, smashed-in phone for almost as much as I'd have paid for repairs. Long live the aftermarket.