All of the hype seems to be surrounding the development of foldable phones as companies like Samsung, Huawei and Xiaomi have announced their own flexible devices. Samsung revealed the Galaxy Fold will be released on April 26, starting at $1,980. With each new model packed with better technology than the last, the prices of smartphones increase each year, and top retailers work to entice consumers to ditch their current devices. Consumers are urged to trade in their older devices for cash or credit back to go toward the purchase of a newer phone.
Here’s how new technology is affecting the trade-in market and other trends to look out for in the near future.
More Trade-Ins For Handheld Devices Are Taking Place Online
Hootsuite and We are Social collaborated on their Q4 Global Digital Statshot report and found that there are almost 2 billion internet users around the world and more than 1 billion people using a mobile phone. According to Statista, mobile e-commerce sales could make up over 70% of total e-commerce sales by 2021.
As the CEO of a company that helps facilitate trade-ins, I’ve seen firsthand how the majority of trade-ins are occurring online as opposed to in physical retail storefronts. It’s no surprise, then, that online trade-ins as a percentage of total trades have doubled year over year based on our own internal data. Cyber Monday was our biggest day for online trade-ins, which is no surprise given the nature of the sales. The weekend of Black Friday, trade-ins were being processed in abundance, with more than double the number of trade-ins compared to the rest of the year.
The marketplace for phone trade-in and other electronic devices includes insurance companies and domestic marketing looking for refurbished technology. As for international markets, Hong Kong is the largest market as phones are sent there and distributed across Asia, specifically Vietnam and Philippines. Since most part manufacturers are in China, it’s more cost effective to send them there to be recycled and reused.
The Wearable Market Is Trending Up
According to Gartner, worldwide shipments of wearable devices will reach 225 million in 2019, an increase of nearly 26% from 2018. Spending on wearable devices is predicted to reach $42 billion in 2019.
We have taken note that wearables were not a huge trade-in product in the marketplace until Q4 2018. For example, when the first-generation Apple Watch was released in 2015, people didn’t race to the store the purchase the second generation in 2017 — unless they didn’t own it already.
As wearable devices continue to grow more popular in 2019, we are seeing a higher demand for these devices, and as a result, consumers are now trading in their currently owned watches for the latest additions at a rapid pace. In 2018, the Apple series 3 watch was just barely a year old as consumers were lining up to upgrade to the Apple series 4 watch. (Full disclosure: Apple is a Phobio partner.)
The Extended Life Cycle Of A Smartphone
While trade-ins were at a record high, consumers are holding onto their older devices longer rather than upgrading every year. This may also be due to the fact that with every new release, prices have been steadily increasing.
Another reason could be that major carriers no longer offer plans that give consumers the chance to upgrade to a newer device every two years. Consumers must either buy brand new devices at full price or take advantage of installment plans if they can’t afford to pay up to $2,000 upfront. This may cause consumers to think twice when it comes to deciding if they really need a new device or if the one they currently have will suffice.
However, once a consumer has a phone that is valued at a greater price, when it’s time to make another upgrade, they will get more money back in their pocket than if they possessed a device that is dated.