Each year, mobile device sales ebb and flow: new technologies find their way into handsets, supply chain and production slowdowns or improvements play out, and other economic factors—major and minor—influence the mobile landscape. Naturally, there is a trickle down effect to the secondary market.
With the first half of the year behind us, we asked Joe Dube, B-Stock’s Director of Mobile Accounts, a few questions on the state of the mobile secondary market over the past several months and what sellers can expect to see in the months ahead.
In your own words, what’s your take on the mobile secondary market right now?
“At the primary market level, the thing to note is that we’re seeing major carriers experiencing slower phone upgrades in the US. According to AT&T’s latest reports, mobility equipment revenue was down by 8% in the April to June period despite beating estimates on some metrics like subscriber addition. Because of this significant dip in primary market sales, we’re seeing less volume in the secondary market simply because there are fewer trade-in devices and customer returns coming back to carriers.
Buyers of secondary market devices are continuously on the lookout for inventory, but their largest sources—typically the major carriers—are the limiting factor here. This has resulted in some interesting trends across our marketplaces. In early-to-mid Q1 of 2024, pre-owned devices depreciated at the typical rate of around 2-4% per month and then in late Q1 pricing dropped a bit. Mor recently, pricing has been stable, with many top-performing models selling for the same prices they were fetching back at the beginning of the year. In fact, in Q2 we saw a recovery and even some increases in average sale price due to lack of supply.”
Can you tell us more about what’s behind the dropoff in new devices sold?
“There are a couple of causes contributing to this. Following the launch of the iPhone 12, the first 5G Apple device, the industry saw what analysts called a “supercycle,” an especially long and strong period of sales performance. The generations to com out since that release have given consumers few compelling reasons to upgrade, given that they were all very similar to the iPhone 12 in terms of function and form factor. Beyond that, devices are now lasting longer than ever thanks to improved physical durability and extended software updates.
One last note to add is that carriers have extended the standard lease or payment period of the devices. Now consumers have up to 36 months to pay off their phones compared to the 24-month period of former years. Keep in mind many customers are not inclined to or even eligible for upgrade until their current devices is paid off, and now that period is now about three years.
With all these factors in play, many different players in the secondary market are feeling the squeeze in some way. With less inventory to go around due to the factors I just discussed, all resellers, processor, and marketplace facilitators are in the same boat.”
Given this climate, what recommendations do you have for mobile OEMs and carriers looking to leverage a secondary market sales channel?
“It’s a good time to be a seller if you have inventory because, again, supply is low which is pushing demand and pricing up. We recommend that companies that are holding onto any trade-in or excess inventory process and sell it as quickly as possible to take advantage of this high-demand period.
In many cases, we see B2B prices competing with B2C prices, so there’s a huge advantage to selling in bulk, because you’ll have significantly lower transaction costs and fewer operational concerns.”
What’s the forward-looking outlook on the secondary market through the end of the year at this point?
“Players in the secondary market will have to remain responsive to what the carriers and OEMs do and how their devices perform.
I can say that there’s a lot of anticipation around the upcoming iPhone event in September where Apple will confirm details about new devices and, possibly offer more information on Apple Intelligence which the market seems to be looking forward to. But we’ll have to wait and see. Apple has a lot riding on this new set of features, and it’s still unclear whether consumers will actually find these AI capabilities desirable and useful enough to spur a larger upgrade cycle than we’ve been seeing.
In terms of B-Stock specifically, new releases are always good, and we’re in a unique position to help move trade-in inventory quickly and at higher recovery rates, thanks to our robust buyer network. There are thousands of business buyers across our marketplace purchasing devices in all lot sizes and conditions, so even if there is weakness in one particular subset of devices or one particular geography, our Enterprise sellers—which include today’s largest OEMs and carriers—are going to continue to benefit from a truly global buyer network that comprises really small business buyers to very large and influential companies.”
Is there anything else you’d like mobile OEMs and carriers to know right now about the state of mobile sales?
“One additional topic to keep an eye on is the growing level of automation being used in the mobile secondary market, including software for grading and diagnostics, and robotics for repair and refurbishing.
From a processing point of view, there are obviously efficiency gains to be had, but the biggest benefit comes at the auction stage in the form of improved marketplace transparency. With automation and robotics in play, there’s less subjectivity around grades and more confidence around functionality, meaning that buyers can bid very aggressively, ultimately funneling money back to sellers more quickly. Over the last couple of years especially, this technology has taken off and will become ubiquitous as the market matures and everyone starts seeing the benefits. If you or your partners aren’t already investing in this, it’s definitely something to look into.
Finally, any stakeholders in the secondary market might want to follow a recent FCC proposal that would require carriers to fully unlock customers’ devices within 60 days. This regulation would ensure that any pre-owned device sold on our marketplace has no network restrictions that would affect the end user’s ability to use it wherever and however they like. When it comes to the secondary market, anything that reduces carrier and OEM restrictions and opens up the market is generally a good thing for everyone.”
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For a deeper look at mobile secondary market pricing data and trends of specific top-performing models over Q2 2024, view our latest edition of the B-Stock Mobile Insider.
To learn more about our resale solutions for mobile phones and other devices, or to schedule a demo, please visit our website today.
