Coronavirus-led shutdown of key manufacturing plants in China and consumer financial concerns fuel interest in pre-owned phone sales, according to a Gartner report.
Image: Getty Images/iStockphoto
Among its many results, the coronavirus has put a damper on first-adopters, some of whom, pre-pandemic, would be the first in line to buy the new iPhone SE in September. But new smartphone sales dropped 20.2% for the first quarter of 2020 (Q1 2020), according to a new report from Gartner.
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While edicts to shelter-at-home and the cloud of economic uncertainty affected the sales of new smartphones, recycled phones are on the upswing (by 24%). A recycled or refurbished phone is generally one that has been traded or sold so the owner can upgrade to the new version or a "better" phone.
Gartner's report, "Market Share: PCs, Ultramobiles and Mobile Phones, All Countries, 1Q20 Update," also noted that the demand for smartphone sales faltering coincided directly with consumers bucking non-essential products.
Top vendors feel the burn
With the exception of Xiaomi, all of the top five smartphone vendors recorded a decline in Q1 2020. Samsung, Huawei, and OPPO suffered the worst performance among the most in-demand vendors.
SEE: Apple iOS 14: A cheat sheet (TechRepublic)
Strong sales of Redmi devices pulled up Xiaomi in both international and online sales making it one of the few that weathered the storm of COVID-19. And there's a reason for that, with the very popular Xiaomi Note's affordable price tag of $150, as well as its strong reputation; it was also well-reviewed on TechRepublic.
In May, ZDNet reported that the Xiaomi Redmi 8 was second only to the very consumer-heralded Samsung Galaxy A51 ($400 and $500 for 5G). In the same story, it reported that smartphone shipments from Samsung and Huawei were down 17% (with a 13% decline for all smart phones).
During Q1 2020, Samsung's smartphone sales declined 22.7%, yet the Korean juggernaut maintained its number one spot in sales, with a 18.5% market share.
Gartner's report of worldwide end-user smartphone sales growth
- Samsung -22.7%
- Huawei -27.3%
- Apple -8.2%
- Xiaomi +1.4%
- OPPO -24.2%
- Others -20.2%
Gartner's report noted that Apple had the least significant consequences from COVID-19 compared with the other top vendors. For Q1 2020, Apple's iPhone sales dipped 8.2%, totalling 41 million units.
Of the top five listed, Huawei had the worst performance in Q1 2020, with sales dropping to 42.5 million units, a decline of 27.3%. However, despite its first-ever decline, Huawei maintained its number two spot, following Samsung.
Huawei, OPPO and Vivo are dependent on China, but Apple is less so. Still, it faced store closures and supply constraints--which had an impact on iPhone sales in Q1 2020.
Image: Gazelle
Recycling phones is gaining popularity
With companies that will buy your phone for cash (to put toward a new one), popping up (i.e. Decluttr, SellCell.com, Gazelle), consumers are taking advantage of the possibility of getting a phone with more capabilities, more storage, and more updates, but for a fraction of the cost.
Image: SellCell
In this time of sheltering-at-home, Marie Kondo-ing, and reversing the home hoard, investing in a recycled (or upcycled) phone is smart.
From March to May 2020, Decluttr--a company that buys old phones and sells used phones, among other media-related items like DVDs and books--reported a 26% increase in refurbished phone sales and a 36% increase in phone trade-ins, compared with the same period in 2019.
SEE: Coronavirus: Critical IT policies and tools every business needs (TechRepublic Premium)
"We have also seen an increased demand for people needing to stay connected to loved ones when they've not been able to see them in person, as well as the need to have the appropriate tech to work from home, and to be entertained outside of work, also from home," said Liam Howley, CMO of Decluttr. "People look for better value options, and refurbished tech offers a lower price tag without a sacrifice on quality."
Sarah McConomy, COO of SellCell.com told TechRepublic, that "90% of the devices that are traded-in get refurbished and then resold back into the US market" for "better value," as well as for the environmental implications. Refurbished and pre-owned phones are a big part of the market now.
McConomy explained that refurbished phones are a much better value, and you can:
- "Effectively buy a top-of-the range refurbished iPhone for hundreds less" than buying new at the Apple Store."
- Have a phone upgraded and refurbished by experts.
- Halt electronic waste and be environmentally friendly.
"The EPA found that Americans throw away over 416,000 phones each day, equalling over 150 million phones every year ending up in landfills," said Yanyan Ji, CMO of ecoATM Gazelle.
McConomy added, "Cell phones contain harmful toxins including lead, mercury, arsenic, cadmium, chlorine and bromine. If disposed of in landfills these toxins can be absorbed into the air, ground and water supply and over time cause harmful effects to the ecosystem and the environment. This creates very serious potential threats to the health of animals, humans, and the wider environment so it's important we do something about it."
The most popular devices right now
"The iPhone XS Max and 11 Pro Max are currently the most popular devices purchased" through Gazelle," Ji said, and added that the most traded-in phones for 2019-2020 were the Apple iPhone 6 at ecoATM, and the Apple iPhone 8 for Gazelle.
Handling many brands and kinds of smartphones hasn't quite signaled to Ji which is the most durable, and Ji said, "Durability is based on if consumers use a case, screen protector, frequency of using their device, if they drop it a lot, etc."
Is Apple or Android more popular?
Ji said the obvious non-committal, it's "personal preference" when choosing between the two favored brands, with some customers preferring Apple devices, and others, Android devices. "It's about the type of software that works best for you and your daily needs."
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