Used smartphones: the $17 billion market you may never have heard of Deloitte Global predicts that in 2016 consumers will For consumers the primary incentives to sell a device – sell outright or trade in approximately 120 million used rather than keeping it as a spare, giving it to a family smartphones generating more than $17 billion for their member or throwing it away – will likely be driven by owners, at an average value of $140 per device. This is the ease of doing so, the luster of owning a latest model a marked increase from the 80 million smartphones device and the trade-in value on offer. traded in 2015 with a value of $11 billion, or an average 328 We expect the market for acquiring second- (or value of $135 . third- or fourth-) hand devices to become steadily The value of sold or traded-in smartphones will likely be more organized. A decade back, those wishing to sell about twice that of wearables and 25 times the value of their old phones would often use online auctions or 329 the virtual reality (VR) hardware market . marketplaces, which could be far slower and uncertain relative to being quoted a trade-in value at the point of Worth $17 billion in 2016, and with 50 percent sale, or simply swapping one phone for another with year-on-year growth in units, the used smartphone a leasing plan. market is forecast to grow four-five times faster than the overall smartphone market. A total of Specialist companies may emerge which forecast 1.6 billion smartphones are expected be sold in trade-in values after one, two or more years of 330 2016, an 11 percent increase on the prior year . ownership, similar to the equivalent service providers in Used smartphones represent an increasing share of the the automobile industry. market: about seven percent of the total smartphone sales by units in 2016, up from five percent in 2015 and In many developed markets the range of options four percent in 2014. for selling a device is steadily growing, ranging from companies specializing in acquiring second-hand devices 331 We predict at least 10 percent of premium smartphones to manufacturers offering leasing options . ($500 or higher) purchased new in 2016 will end up having three or more owners before being retired, and We expect there to be significant variation in the will still be used actively in 2020 or beyond. practice of trading in smartphones by market. Deloitte member firms’ research in 20 markets found We would expect trade-in value per device to vary by that as of mid-2015 approximately 12 percent of all model and market, but across the 120 million used consumers sold their smartphones (see Figure 16). smartphones that are likely to be sold in 2016, we Of these two-thirds sold their smartphones outright, estimate that the average value per device will be and a third traded them in with an operator or device about $140. manufacturer. In Singapore, about a quarter of smartphones were traded in; in Norway, Italy, Russia About half of these devices are expected to be traded and Finland, only five percent were sold or exchanged. in to manufacturers or carriers in exchange for credit Deloitte Global would expect that over time, most toward a new smartphone. The remainder will likely be markets should see a steady increase in trade-ins. sold online privately, to retail shops or to second-hand device specialists. We expect the practice of selling smartphones could well accelerate through 2020 as both consumers and suppliers increasingly embrace the practice of selling or acquiring second-hand smartphones. 50