It may have been delayed, but the Covid-19 pandemic’s impact on US mobile device trade-in programmes has now happened with a vengeance, and has seen a 50% year-on-year and 57% quarter-on-quarter decrease in cash returned to US phone owners, according to research from HYLA Mobile, a provider of software technology and services for mobile device returns management and reuse.
The company’s first quarter 2020 research on mobile device trade-in trends found that, despite what it said was a quarter like no other with the coronavirus pandemic causing significant disruption to the supply and distribution of new and pre-owned devices, the outbreak has not had much impact on pre-owned device values.
In absolute value terms, HYLA’s Q2 2020 trade-in trends research found that a total of $225m was returned to US consumers as part of trade-in programmes and showing the quarterly fall, HYLA’s data highlighted the fact that typically a seasonal dip in Q2 from Q1 is about 15%, not the 57% decrease recorded.
Yet while US operators, OEMs and retailers have facilitated fewer trade-ins owing to store closures and shutdowns, the study did show that their values have stayed strong. Indeed, it revealed that the average price of a smartphone at trade-in has increased by 9% from $102.25 in Q1, to $111.47 in Q2. Furthermore, the highest trade-in value for a device recorded during the second quarter was $580.58, while the highest trade-in value recorded in Q1 was $560.97.
“In Q1, as the virus spread across the world, the secondary device market maintained its high demand. But our data now reveals the significant impact the pandemic has had on the smartphone market,” said Biju Nair, president and CEO of HYLA. “Due to sustained demand for pre-owned devices, their value is rising. Operators, OEMs and retailers need these devices to service their insurance programmes and emerging markets need more affordable, high-quality devices.”
The most-traded device in Q1 2020 was the Apple iPhone 7, followed by the iPhone 8 Plus, iPhone 8, iPhone 7 and the iPhone X, which made its first appearance in the top five traded devices. The top five traded devices accounted for half of all traded devices during the quarter. This was the first quarter that variations of the iPhone 6 had not featured in the top five traded devices since Q1 2016.
The Samsung S7 was the most traded Samsung device in Q2 and has been the top traded Samsung device since Q1 2018. The iPhone 7 was the top traded iPhone for the sixth consecutive quarter. Three months earlier, the top traded device in Q1 2020 was the iPhone 7, followed by the iPhone 7 Plus, iPhone 8 Plus, iPhone 6S and iPhone 8. The top five traded devices accounted for nearly 60% of smartphones traded.
The study also showed that the average age of a smartphone at trade-in continues to rise. The average age of an Android device was 3.13 years, up from 3.07 years in Q1. The average age of an iPhone at trade-in was 3.25 years (up from 3.17 years in Q1 2020), while the average age of an Android smartphone was 2.75 years (down from 2.77 in Q1 2020). The Galaxy S20 Ultra received the highest trade-in value of $580.58 at trade-in. In the three months since its launch, the device has depreciated by 59%.
Indicating the effect of stay-at-home orders and lockdowns, online device trade-ins for Q2 2020 increased 66% compared with the the same period last year, and 172% over Q1 of this year.
With such strong trade-in activity taking place while retail stores were mostly closed, it was clear to Biju that consumers were not hampered by conducting their trades online, and he advised going forward that operators, retailers and OEMs should harness this momentum and continue to build out their omni-channel trade-in platforms, giving consumers the ability to begin their trade-in transaction on one channel and finish it on any channel they choose.
“We are also seeing increasing trade-in related promotions from all participants in the ecosystem, which encourages higher upgrade rates, drives device and accessories-related sales, and replenishes the supply of devices that can be refurbished and redistributed,” he concluded.
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August 05, 2020 at 04:23PM
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Covid collapses secondary smartphone sales but trade-in values increase - ComputerWeekly.com
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