iPhone 12 tops as cost of living crisis drives consumers to sustainability and device circularity
By Jeph Ajobaju, Chief Copy Editor
There is a growing appetite for second-hand smartphones, fuelled by global cost of living crisis, with revenue from this market segment reaching $13.3 billion in the first quarter of 2023 (Q1 2023), up from $9.1 billion in Q1 2022.
A research company, CCS Insight, said the second-hand sector booked sales growth of 14 per cent year-on-year (YoY), outpacing the market for new devices.
It identified a high demand for second-hand flagship models being sold like new and an increasingly diversified range of sellers as key drivers of the growth.
iPhone 12 most sought after
Analyst Kane McKenna reiterated the secondary smartphone market is “constantly outpacing the equivalent new device market as better products become available from leading international brands”, with iPhone 12 the most sought-after product in the quarter, per reporting by The Guardian.
A cost-of-living crisis factored largely in the uptake of second-hand smartphones, but a growing awareness of sustainability and device circularity also played a role.
However, CCS Insight cited supply as a negative factor, as the segment relied on consumer trade-ins instead of traditional supply chains.
It named the United States as a market which shows a “precarious lack of supply from other global markets.”
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Telephone demand dips 21% worldwide
However, telephone shipments have dipped 21 per cent worldwide since 2021, gleaned from an International Data Corporation (IDC) report, which shows shipments dropped 22 per cent from 340 million units in the first quarter of 2021 (Q1 2021) to 268 million in Q1 2023.
The highest shipments in Q1 2021 slashed to 311.2 million units in Q1 2022 and further declined to 268 million units in Q1 2023.
Year-on-year (YoY), global shipments reached 1.67 million units in 2021 but dropped to 1.21 billion units in 2022.
Total smartphone shipments declined 14.6 per cent YoY to 268.6 million units in Q1 2023, the seventh consecutive quarterly decline as the smartphone market struggled with lukewarm demand, inflation, and macro uncertainties.
IDC said the decline was more than the 12.7 per cent it previously estimated.
The World Economic Forum (WEF) in a 2021 report noted that “some experts think that ‘peak smartphone’ is already behind us, market research group IDC remained hopeful for the industry to return to previous heights and even surpass them.”
Inventory clearing and adjustment period
Nabila Popal, IDC Research Director of Worldwide Tracker, explained “The industry is going through a period of inventory clearing and adjustment.
“Market players remain cautious deploying a conservative approach rather than dumping more stock into a channel to chase temporary gains in share. I think this is the smart thing to do if we want to avoid an unhealthy situation like 2022.
“While we are optimistic about recovery by the end of the year, we still have a tough 3-6 months ahead. Everyone is anxious about exactly when the tide will turn and wants to be the first to ride the wave of recovery. However, it is a tricky situation.”
Inflation and market saturation have thrown the global phone shipment market into turmoil, especially as projections about a great recession loom.
