Refurbished high-quality iPhones are Apple’s secret weapons that are rapidly rising in the international market instead of the super cheap Android phones. Available at an extra budget cost, the worldwide market for refurbished smartphones grew by 13 percent over the last year. This is in stark contrast to the bigger marketplace for new smartphones, which grew by barely three percent throughout the 12 months.
Apple’s gross sale of the recent iPhones has been flat for the last year. Nevertheless, Apple actually earned 13 percent higher revenues by selling more high-end products, including the hottest iPhone 8 and iPhone X. Among Android smartphones, the shrinking volume of sale was financially devastating, because most manufacturers were already making very little to nothing on selling the low-end and middle-tier phones.
A refurbished smartphone business revealed that merely 25 percent of all pre-owned iPhones are sold back into the market and of these, only some are overhauled. These refurbished models have a huge impact on the market. With 13 percent overall growth, the refurbished smartphone market is now close to 10 percent of the total global smartphones market.
The extended lifespan and resale cycle of the existing iPhones is commonly cited as a potential threat to Apple’s future sales growth. However, the low growth of the new smartphone market in 2017 can be partially attributed to the growth of the refurb market.
Thus, the mid to low-end market for new smartphones is being utilized by refurbished high-end phones, mostly Apple iPhones. For users who are unable to afford a brand new iPhone and are otherwise likely to buy a lower-priced Android, Apple has strategized a platform to sell refurbished iPhones. The iPhone supports its hardware with iOS updates for four to five years, rather than less than a year or two as is seen common among Android makers.
The latest iPhones also sold with a fast processor and a modern and efficient iOS whereas the Androids, particularly the low-end models, are sold with underperforming chips and often with an older version of an OS.
Apple’s dominance is more obvious in the refurbished smartphone market than in the new smartphone market. As the refurbished market grows even more significantly, the market for new devices will slow further in 2018. Regions with the highest volume include the US and Europe, while the fastest growing market for refurbished smartphones includes Africa, South East Asia, and India. Each country has been realizing the initiatives from major operators, OEMs and major distributors who are adding full life-cycle services.
Using data analysis to predict the future resale value of their smartphones, Apple provides their consumers with a guaranteed buy-back value at various points during their ownership. This favours the consumers to manage the high cost of their favourite flagship smartphones and obtain a useful contribution to partially balance the cost of their next phone.