Rising demand for used smartphones in South Korea drives prices up

Several factors are contributing to this trend. The increasing cost of new smartphones, combined with limited innovation, is leading consumers to reconsider the need for immediate upgrades. Features such as artificial intelligence, which can be added to older models through software updates, make the purchase of a new phone less urgent for many buyers. As a result, more people are viewing used phones as a practical alternative.

Pricing going up causing phoneflation

The term “phoneflation,” blending "smartphone" and "inflation," captures this phenomenon. With higher new phone prices, used devices have become more attractive, further driving up their resale value. For instance, the iPhone 11, released in 2019, was initially priced at € 1,388, while the iPhone 15, introduced in 2023, costs up to € 1,745 in South Korea.

Another trend boosting the secondary mobile market is the quicker turnaround of device ownership. While people once held onto their smartphones for up to five years, they are now more likely to sell older devices soon after purchasing a new one, helping offset the rising price tags of the latest models. This trend has raised the trade in price of used phones significantly. This trend is exactly the opposite in comparison to USA and Europe. In these regions consumers tend to hold longer to their devices than ever. Up from an average 24-month only a few years ago, to well over 3 years currently.

Why do mobile last longer?

Improved quality and durability also play a role in increasing demand for second-hand phones. Manufacturers such as Samsung continue to provide regular software updates, ensuring that older devices can support new features. Samsung’s recently introduced AI capabilities for the Samsung Galaxy S24, for example, are now available on older models like the Galaxy S22 and S21.

Samsung dominates the used phone market in South Korea, with its share growing from 55% in 2019 to 70% in 2024. This trend reflects the company’s 70% share of the domestic smartphone market and the popularity of Samsung’s aggressive trade-in program, which incentivizes customers to exchange their old devices when buying new ones. Despite Samsung’s large market presence, Apple products maintain higher resale values, with used Apple iPhones selling for an average of € 348, compared to € 124 for Samsung models.

Trends

The future of the second-hand phone market looks promising, with major corporations entering the sector. Naver has launched a used phone trading service through its KREAM platform, while telecommunications giants KT and LG Uplus have introduced their own platforms via subsidiaries. A recent survey by the Korea Information Society Development Institute found that 34.5% of respondents had sold an old phone, while 30% had purchased a used one.

Source: The Chosun Daily