How Exorbitant Smartphone Pricing Plays a Major Role in Increased Refurbished Retail?
It is a known fact that smartphone prices are increasing at a massive rate which eventually is pushing in increased business opportunities for the refurbished retailers. Based on reports released by IDC, the pre-owned or rather used mobile phone market is expected to hit the $52.7 billion figure in the next few years with the average resale rate being somewhere in the ballpark of $180. Moreover, when evaluated against the existing smartphone market, the cost of user devices is lesser, even if the models are comparable in nature. However, in hindsight, it is important for analysts and even the consumers to understand as why the refurbished market is booming at such a rapid rate, despite the brands launching new and improved devices, frequently enough.
The Cost Factor
Before we move any further into this discussion, it is important to understand that high-end smartphones aren’t getting any cheaper. The likes of iPhone X from Apple, priced at a whopping $1149 for the 256GB storage variant, are slowly but steadily compelling users to concentrate on the pre-owned devices. Not just Apple, even gadgets from Samsung aren’t available for less as the much-anticipated Samsung Galaxy S9 also flaunts an exorbitant price point of $949. With newly launched smartphones getting costlier with time, a majority of customers are continually opting for refurbished smartphones from premium brands, just to enjoy the exceptional set of attributes and obviously the status symbol.
Increased Smartphone Longevity
Customers often end up using a premium smartphone for a few additional months, just to be able to extract the most out of something that has been paid for. For example, if an individual has purchased a gadget in the ballpark of $1000, he or she would want to use it longer, in order to validate the value. Therefore, newer smartphones aren’t selling like hot cakes, something which was true at least a few years back. With smartphone longevity on the way up, individuals are also selling off the used gadgets for a higher resale value. What needs to be understood is that the premium devices are priced exorbitantly for a reason. While they sport better build quality, most sensors and features used by the manufacturers are top-notch and do call for higher prices. Therefore, the acceptance of the high-end smartphones from brands of repute within the refurbished arena is also on the higher side.
It is a known fact that whenever newer devices are launched, the companies truncate the prices pertaining to the older variants. Therefore, with smartphone manufacturers launching devices every now and then, sometimes even two models in one year, the price points associated with the predecessors are expected to go down. Moreover, if the prices for packaged yet old models go down, then the refurbished versions of the same are expected to retail at a far lesser price. Therefore, a majority of customers are shifting their attention to the refurbished mobile phones, especially in regards to budget. What’s interesting to note is that 2019 is deemed to be the year of 5G smartphones. However, once 5G devices start coming into the market, the existing 4G smartphones, regardless of the price point, will get cheaper and easier to procure. The same holds true even for the pre-owned and refurbished gadgets.
The Reality of Refurbished Smartphones
There are many who confuse pre-owned and used devices with refurbished smartphones. While the former can be sold as a part of the private sale, there are select online and offline counters for retailing refurbished smartphones. What’s interesting to note is that refurbished devices are primarily the handsets which customers return back to the seller, directly at the collection point— courtesy a small pre-existing manufacturing defect. However, the seller or even a third-party vendor collects the flawed devices and fixes the same, before selling each over select offline and online domains. Counters like Togofogo have an extensive collection of refurbished devices which even come with additional warranties.
It’s evident that a majority of refurbished players are slowly making their presence felt in this keenly contested market. While this emergence is giving a tough competition to the newly launched devices, it is also offering a world of possibilities to certain enterprises that have plans of making low-priced smartphones available to their employees.