Smartphones, reincarnated
Every fortnight 1,230,000 new smartphones are sold in the UK. But what is the fate of abandoned smartphones?
In 2007, the average trade-in value of phones was £20 and many old units simply ended up in a drawer. By 2013, the average had reached £108. Today, smartphone trade-in values can reach as high as £400.
This rising value has increased the likelihood of a second life for many smartphones. We estimate that in the last year, about 40% of second-hand smartphones – almost 13 million units – were destined to stay in use with a new owner through handing down or trade-ins.
Figure 1. Afterlife of smartphones
Q. What did you do with your previous mobile phone when you last upgraded?
Weighted base: Respondents who own or have access to a smartphone (3,039)
Source: UK edition, Deloitte Global Mobile Consumer Survey, May - Jun 2015
If the rise in phone recycling from the last few years holds steady, we expect that in 2015, we could see more than 7 million phones, mostly smartphones, traded-in for a total value of approximately £900 million.
This trend should continue rising, as options for sales and trade-ins expand. There are currently more than 50 registered phone recycling companies. And increasingly, trade-ins are being offered when buying a new smartphone, removing the need for individual consumers to handle the sale of their old phone on their own.
Moving forward, the second life of smartphone is likely to become an increasingly important dynamic in the mobile industry:
- Many consumers will gain access high-end devices that they could not otherwise afford
- Smartphone vendors may start marketing the potential future trade-in value of their phones
- Companies specialising in acquiring second-hand phones are likely to have to compete harder to acquire used units
- Manufacturers and operating system (OS) developers should remain aware of possibly extending hardware lifetimes
- Operators could offer superior trade-in rates and simple trade-in procedures to lure users from other networks