Refurbished
13
Jan
2025
4
min read

EU ban on non-USB-C devices: what it means for prices and supply on the secondary mobile market

With new regulations taking effective by 28 December 2024, the European Union’s decision to prohibit the import of non-USB-C devices, including smartphones and tablets, has sparked discussions about its potential ramifications. Secondarymarket.news reached out to prominent players in the secondary mobile market, Northladder, Recommerce, Cyculus, Cykero, CCS Insight, and Counterpoint, to assess the impact this legislation might have on supply chains and pricing in the EU’s secondary market.

The impact on the supply chain: will uncertainty tighten the market?

The EU's directive introduces significant uncertainty for businesses operating in the secondary mobile market, causing many to reassess their strategies. According to CCS Insight, the regulatory ambiguity has made leading companies cautious, which could disrupt the supply chain. They argue that larger organizations are less likely to invest in second-hand propositions in the short term due to challenges in securing stock and managing risk in the secondary market. Instead, non-compliant devices may flow through unregulated channels, including small repair shops, peer-to-peer platforms, and smaller sellers operating on online marketplaces, where enforcement will be harder to implement.

Fergal Donovan from Cyculus points out that over 40% of pre-owned devices sold in Europe could be affected by this regulation, significantly impacting the regional marketplace. As competition for devices intensifies, prices in Europe are expected to rise, while demand may fall in other regions such as the US and Asia. This disruption could even foster a black market for non-compliant devices, thriving until enforcement measures catch up.

Counterpoint highlights that the scale of the impact will depend on whether the directive includes used devices and how strictly it is enforced. If older iPhones, which dominate the used smartphone market, are banned, the EU could lose up to a third of its secondary device supply. However, if the directive exempts used devices, the overall impact would likely be minimal.

Northladder’s Joost Wijermars acknowledges that regulatory uncertainty will tighten supply in the short term as businesses recalibrate their market strategies. However, they predict an eventual increase in demand for compliant pre-owned devices. They emphasize that trade-in programs offering competitive prices and second-life solutions are key to mitigating supply chain challenges. By sourcing devices from diverse markets, Northladder aims to maintain inventory stability and support circularity efforts.

Recommerce takes a more optimistic view, believing that a transparent and cleaner market, as envisioned by the EU directive, will help build a stronger circular economy in Europe. Meanwhile, Cykero warns that ambiguity surrounding refurbished device imports could further tighten the secondary market supply. This impact may be more pronounced in regions with stricter enforcement, although ripple effects on global supply chains cannot be ruled out.

Pricing dynamics: will prices rise or follow seasonal trends?

Pricing is another critical aspect influenced by the EU’s directive. According to CCS Insight, supply pressure is likely to push prices higher, but second-hand devices will remain competitive, capped at 10%-20% below the price of new counterparts.

Cyculus expects prices to rise due to basic supply-and-demand dynamics. However, sellers might initially absorb some costs to maintain sales volumes. Cyculus also notes that uncertainties around enforcement make it challenging to predict long-term pricing trends with confidence.

Counterpoint’s Jan Stryjak anticipates that reduced supply will inevitably result in higher prices. They argue that if refurbishers are forced to source more devices from within Europe, where costs are higher due to the region’s premium market nature, prices will rise further.

Northladder also predicts short-term price hikes as the market adjusts to the new regulations. They stress the importance of quickly adopting trade-ins as standard practice to maintain market flow. By offering fair trade-in values and seamless upgrade options, businesses can stabilize pricing and meet consumer demand. In the longer term, Northladder expects the growing demand for compliant pre-owned devices to mitigate price volatility and support circularity.

Recommerce points out that with fewer new Apple devices available, refurbished device prices are expected to rise, creating more opportunities for refurbishment players.

CEO Bichoi METIAS from Cykero agrees that reduced supply will likely lead to higher prices, especially if the directive indirectly restricts the import of certain refurbished models. However, they note that if enforcement barriers are low, prices could still align with typical seasonal trends.

Regional and global implications

The EU directive may primarily target European markets, but its effects could ripple through global supply chains. With fewer compliant devices available in Europe, competition for stock is likely to increase, potentially altering pricing dynamics in other regions.

Additionally, the rise of unregulated channels for non-compliant devices could undermine the directive’s goal of fostering a sustainable and transparent secondary market. Smaller sellers and informal markets may dominate this segment, posing challenges for enforcement and compliance across the industry.

Conclusion: navigating a shifting landscape

The EU’s decision to ban non-USB-C devices by 2024 marks a pivotal moment for the secondary mobile market. Supply chain disruptions, pricing adjustments, and enforcement challenges are expected in the short term. However, the directive also presents an opportunity to strengthen the circular economy and encourage sustainable practices within the industry.

By adapting swiftly and fostering innovation in trade-in programs and second-life solutions, businesses in the secondary market can overcome these challenges. While uncertainties remain, the long-term outlook could see a more transparent and efficient marketplace emerging in Europe, paving the way for a sustainable future.

Interested in the global market for used electronics?

From now on, you'll never miss a thing and can easily stay up to date with the latest developments in the secondary market. Sign up today for the newsletter from secondarymarket.news. It's filled with the latest news, trends, developments, and gossip. Stay informed and don't miss out on anything!

Daily (except on Sundays), you'll receive the latest news from the global secondary market straight to your inbox after registering. This way, you'll always stay up to date with the latest secondary market developments and trends.

Sign up for our newsletter

Thank you for registering for the newsletter

From now on, you'll always stay informed and won't miss out on the latest trends and developments in the global secondary market for used electronics.
Oops! Something went wrong while submitting the form.
© 2024 Secondary Market News. All rights reserved.
Privacy & Cookies