Be Careful When Buying a Refurbished Phone

By ABI Research, Special for  USDR

ABI Research, the leader in transformative technology innovation market intelligence, forecasts global handset sales, including both smartphones and mobile phones, will increase by 4.9% in 2016. One key trend that looks set to create concern among smartphone vendors is the growing and ever more important refurbished market, which will push OEMs to reconsider their branding options and portfolio as a  whole.

“We anticipate the refurbished market to grow significantly over the next five years, particularly as it starts to encompass devices with advanced feature sets and 4G connectivity,” says David McQueen, Research Director at ABI Research. “The spike in the refurbished market will cause a ripple effect, enabling companies like Apple to drive down pricing in their product portfolios without resorting to pushing through the next new, lost-cost product launch. This will be particularly useful for companies targeting emerging markets in the years ahead to help both expand their brand reach and addressable  market.”

Samsung, specifically, remains the global market’s leading smartphone and handset vendor. While its expansive device portfolio allows it to claim stake to a larger addressable market, its device range is also putting pressure on the company’s margins. ABI Research suggests this to be the main reason behind the company’s decision to scale back on sale of old models and provide an improved mix of new launches to increase the blended average selling price (ASP) in  2016.

The Asia-Pacific region will continue to drive overall industry growth, projected to account for more than 50% of sales through to 2020. ABI Research data suggests that Africa will show the greatest growth rate over the next five years, while also becoming the second largest handset shipment region from 2016. Regardless of region, all current market leaders will need to take necessary, forward-thinking measures in the years ahead if they wish to retain healthy margins and stay on top in a market that is becoming increasingly commoditized and is clearly reaching saturation despite the billions of new handsets being sold each  year.

“Apple and Samsung are very successful in maintaining margins so far, but many others are beginning to fall by the wayside, notably, Blackberry, HTC, and Sony,” concludes McQueen. “It will be those that can control costs, create quick and sustainable differentiation, and establish new business models—such as those being touted by Xiaomi and Jolla—that will remain competitive and resilient to the expected ongoing market pressures. Support for reverse channel business models that embrace the refurbished market will be an important part of that  mix.”

These findings are part of ABI Research’s Smartphone & Handset Tracker Service (https://www.abiresearch.com/market-research/service/mobile-devices/), which includes research reports, market data, insights, and competitive  assessments.

About ABI  Research

For more than 25 years, ABI Research has stood at the forefront of technology market intelligence, partnering with innovative business leaders to implement informed, transformative technology decisions. The company employs a global team of senior analysts to provide comprehensive research and consulting services through deep quantitative forecasts, qualitative analyses and teardown services. An industry pioneer, ABI Research is proactive in its approach, frequently uncovering ground-breaking business cycles ahead of the curve and publishing research 18 to 36 months in advance of other organizations. In all, the company covers more than 60 services, spanning 11 technology sectors. For more information, visit  www.abiresearch.com.

SOURCE ABI  Research

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