By the end of this year, more than half of all iPhones in use will be second-hand devices, according to a leading analyst firm.
CCS Insight predicts there will be 1.3 billion iPhones in circulation by the end of 2023, and that more than 50% of them will be reused.
The prediction highlights the ever-lengthening lifespan of Apple’s smartphones, with CCS claiming that from 2024 the average life of an iPhone will be eight years.
CCS has been tracking the second-hand device market for the past couple of years and claims the iPhone is by far and away the most reused smartphone. “We have seen a huge surge in interest in the second-hand technology market over the last few years, which has really come about for a few reasons,” said Leo Gebbie, principal analyst at the firm.
Gebbie said one of the biggest reasons is a lack of major upgrades between one iPhone and the next. “The iPhone 15 has just come out, and it is incrementally better than the iPhone 14, which was incrementally better than the iPhone 13,” he said.
“Increasingly there is this view from customers that say, ‘hey, I could go and spend a thousand pounds on a brand new iPhone 15, or I can go and spend four or five hundred pounds on a good quality refurbished iPhone 13.”
People’s motivation for buying second-hand iPhones isn’t purely financial, though, with customers recognising that it’s also good for the environment, Gebbie said.
iPhone Dominance
The second-hand smartphone market is almost entirely dominated by Apple, according to CCS Insight’s research. “The iPhone is driving a vast amount of volumes in the secondary device landscape,” said Gebbie. “It is by far and away the brand that people choose to get and obviously part of this comes from the fact that new Apple devices are expensive. This is a way that people can go and get the device they want for a more affordable price point.”
There’s also a whole industry that has matured around providing refurbished iPhones. “We see very well organised supply now in the secondary market,” said Gebbie.
“Increasingly, we do see it as being a huge way that people are getting into the Apple ecosystem, and the way that people are buying their first iPhone. Or they’re upgrading to a new iPhone if they’ve been holding on to a far older model for a really long time. It’s a behavior that is becoming very, very well established throughout the industry.”
Although a high proportion of the demand for reused iPhones comes from emerging markets, Gebbie said there was “very high levels of interest” in markets such as the U.S. and the U.K. too.
Worry For Apple?
Apple offers refurbished devices via its own website, in addition to the burgeoning third-party market for reused iPhones. But will the company be concerned by the growing proportion of customers who are seeking out second-hand devices?
“Apple is happy enough with the situation because, right now, Apple is in a position where its services line of revenue is growing very strongly,” said Gebbie. “For every person who buys an iPhone, even if it’s a second-hand iPhone, what they then tend to do is give money to Apple on a month-by-month basis, because they’re subscribing to services like Apple TV or Apple Fitness.”
App Store purchases are also subject to the 30% commission that Apple takes from developers, Gebbie added.
“However, there certainly is a point somewhere in the future where this could become problematic for Apple,” said Gebbie. “Every person who’s buying a second-hand iPhone instead of a brand new iPhone is ultimately taking a chunk out of that top-line revenue and, at a certain points in time, we do think that will be something that Apple might think more seriously about.”
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