Counterpoint: US secondary mobile market faces struggles amid declining supply and rising prices

Reduced supply due to carrier auction constraints

One of the biggest challenges is a reduction in supply caused by lower carrier auction volumes, driven by declining sales of Apple iPhones in the primary market. With fewer devices entering the secondary market, especially high-quality, A-grade models, the ecosystem of “Buy and Sell” retailers is strained. Refurbished smartphone businesses are now focusing on lower-grade devices (B and C grades) to meet demand, which affects the availability and quality of devices for end consumers.

Shift to BYOD puts pressure on supply and pricing

Carriers’ recent push for Bring Your Own Device (BYOD) options has added pressure to the already stressed supply chain. While BYOD programs boost demand for unlocked phones, the low upgrade rates among users have constricted the supply of pre-owned devices. As a result, the average selling prices (ASPs) for refurbished devices are on the rise, alongside the original MSRP, making it tougher for consumers to find affordable options.

New features fail to boost demand for refurbished models

Despite advancements in smartphone features like eSIM compatibility and AI enhancements, these updates have not driven a corresponding spike in demand for refurbished models. Consumers appear focused on specific high-demand models, like the Apple iPhone 13 and iPhone 14 series, which remain in short supply. This scarcity has intensified the market strain, leaving many refurbished smartphone businesses struggling to keep up with demand.

Outlook for 2024: a tough year ahead

With fewer exports of used smartphones from the US and limited availability of popular models, 2024 could be a challenging year for refurbished smartphone companies in the country. Market conditions suggest that businesses in this mature sector will need to adapt to limited inventory and rising costs to stay competitive.