As smartphones have entered a mature phase, the pace of innovation has slowed down. Additionally, the hardware and software of smartphones have reached a certain level, leading to longer lifespans and indirectly causing longer replacement cycles. On the other hand, to boost sales, brands and retailers have opened up old-for-new exchange programs, which has helped stabilize the growing market for second-hand and refurbished phones. Furthermore, the recent global economic downturn and consumer spending constraints have further driven the growth of this market.

The second-hand and refurbished phone market has been gradually strengthening, even eroding the performance of the new smartphone market. According to MediaTek, a major mobile chipmaker, the total volume of the iPhone second-hand and refurbished market is estimated to be around 50 million to 100 million units annually.

TrendForce estimates that the sales volume of this second-hand and refurbished market will be between 150 million to 200 million units this year, accounting for approximately 10-15% of the overall handset sales.

Looking ahead to 2024, due to the global economic situation not being overly optimistic, as well as the increased demand for smartphones in emerging regions, the market is expected to continue to contribute to growth. We estimate that the second-hand and refurbished market will reach a sales performance of over 200 million units in 2024.

On the other hand, the second-hand and refurbished market is still mainly dominated by high-end phones from Apple and non-Apple brands with higher resale value. Among them, Apple accounts for about 50% of the market, followed by Samsung.

According to TrendForce’s research, the global production volume of smartphones in 2022 is projected to reach 1.192 billion units, a YoY decrease of 10.6%, exceeding even the decline seen in the pandemic year.

However, the market for refurbished smartphones is a completely different story. Research institutions have pointed out that Apple’s sales of refurbished smartphones have grown by 16%, and the company now holds nearly half of the refurbished phone market.

The thriving market for refurbished and second-hand smartphones has ignited demand for touch and display integration IC (TDDI) from the repair market since 2H22, and this demand is expected to double to 200 million units in 2023.

But why is the demand for refurbished and second-hand smartphones increasing year after year? There are two possible reasons based on the current overall environment:

The price of refurbished and second-hand smartphones is lower than that of new smartphones.

Most refurbished and second-hand smartphones are refurbished before being sold back to the market. Their functionality and appearance are mostly normal, and unless the user mentions it, it is difficult to tell if it is a second-hand smartphone.

When purchasing refurbished smartphones, most people prioritize high-end models with high price points, regardless of the brand. However, the entry threshold for high-end new smartphones is often high, but this type of smartphone can be obtained at a cheap price in the second-hand market.

Why iPhone is the preferred choice?

• Brand recognition: Consumers of all ages may immediately think of Apple/iPhone when they hear the words “smartphone brand,” and iPhone can become a faction in its own right compared to Android smartphones.
• Operating system support: For smartphone users, the biggest fear when using the same smartphone for a long time is encountering the problem of the operating system no longer being supported. Although the smartphone can still be used when the operating system cannot be upgraded, security is no longer guaranteed.

However, the support and fluidity of the operating system are often advantages of Apple, and the iOS update support period is quite long, up to 6 years. Although 6 years may not sound long, statistics show that the average device usage cycle for an iPhone user is 3 years, and a support period of 6 years is actually a very long time. Even if you take over someone else’s second-hand smartphone, you don’t have to worry too much about the operating system not being supported.

While the growth of the refurbished smartphone market is good news for consumers, how much benefit does it bring to smartphone manufacturers?

For smartphone manufacturers, most of the profits come from the sale of new smartphones. When consumers purchase second-hand smartphones, the profit margins for manufacturers are reduced. However, manufacturers can still benefit from the demand for refurbished smartphones by participating in the refurbishment process or selling refurbished smartphones themselves.

(TechNews) Following Apple’s inclusion of the iPhone 6 Plus on its list of obsolete products in February this year, the iPad Air 2 and iPad mini 2 have also recently been added officially, making it difficult to obtain official repair services for these products in the future.

The iPad Air 2, launched in October 2014, was  Apple’s first iPad Air with Touch ID recognition and utilized the A8X processor. As for the iPad mini 2, which was launched in November 2013, it utilized the same A7 processor as the iPhone 5s, along with the M7 motion-sensing co-processor.

Apple mostly considers products that are 5 to 7 years old as outdated. The iPad Air 2 and iPad mini 2 have already exceeded this lifespan and it is quite reasonable to deem these products obsolete.

However, the inclusion of a product on the obsolete list does not mean that the device cannot be used. If consumers have maintenance requirements, it will depend on whether the company has replacement parts in stock. If there are missing parts, Apple will not repair this product for users.

(Source: https://technews.tw/2022/05/05/bye-bye-ipad-air-2-ipad-mini-2/)

On the eve of Apple’s upcoming new product launch conference, the global market research organization, TrendForce, provides the following reference data for your articles and reporting.

Reference data as follows:

Global smartphone production came to 356 million units for 2021, showing a QoQ increase of 9.5%, according to TrendForce’s latest investigations. The second half of last year saw demand injections related to the peak promotion season for e-commerce platforms and year-end holiday sales. These factors thus bolstered smartphone production and resulted in 4Q21 seeing the highest QoQ growth rate for the year. Apple’s new iPhones were the primary growth driver. On the other hand, the performances of a few smartphone brands were constrained by the shortage of some key components. Hence, the total smartphone production for 4Q21 was slightly lower compared with 4Q20 or even 4Q19.

Apple took production leadership in 4Q21 with record high of 85.5 million units

After unveiling the iPhone 13 series in September, Apple started aggressively ramping up the shipments of these new devices to meet market demand. Owing to its fast-paced sales and marketing rhythms, Apple has been able to take first place in the quarterly ranking of smartphone brands by production market hare for many fourth quarters, and 4Q21 was no exception. Besides maintaining its top position in the fourth-quarter brand ranking, Apple raised its quarterly iPhone production to a new record high of 85.5 million units, a 66.0% QoQ increase. In the aspect of pricing strategy, the prices of the new iPhone 13 models were reasonable for consumers, while the price reductions for the older iPhone models were noticeable as well. Moreover, the capturing of the market share left by Huawei can be considered as the main factor behind Apple’s stellar performance in 4Q21. Over time, the orders for Huawei’s flagship models (i.e., the P and Mate series) have been gradually replaced by iPhone orders. In terms of annual production, Apple reached 233 million units for 2021, up from almost 200 million units for 2020. The growth was mainly attributed to an expansion of Apple’s market share in China from 10% to 16%. Samsung took second place in the global brand ranking for 4Q21 with 71 million units, a 2.9% QoQ increase. In 2Q21, the spread of COVID-19 outbreaks in Vietnam affected smartphone production facilities in the country and lowered Samsung’s capacity utilization rate. But apart from that quarter, Samsung’s performance remained stable for the other three quarters of last year. For the ranking of smartphone brands by annual production, Samsung was still the leader for 2021 with 275 million units.

OPPO (including Realme and OnePlus) took third place in the ranking with a quarterly production of 48 million units, a 5.9% QoQ decrease, for 4Q21. Xiaomi (including Redmi, POCO, and Black Shark) took fourth place with a production of 45.5 million units, a 2.2% QoQ increase. Fifth-ranked Vivo (including iQoo), on the other hand, reduced its smartphone production by 11.8% QoQ to 30 million units. As these three Chinese brands’ target markets and product strategies show significant overlap, their control of key components that are currently in shortage will have a direct impact on their production volumes going forward. It should also be pointed out that Honor, which was spun off from Huawei in early 2021 and underwent a period of corporate restructuring and component procurement in 1H21, experienced a meteoric rise in 2H21. Much like other Chinese brands, Honor adopts a sales strategy that primarily focuses on the Chinese market, meaning Honor’s smartphone business will continue to affect OPPO, Xiaomi, and Vivo, all of which place a top priority on domestic sales.

Annual smartphone production for 2022 will likely reach 1.381 billion units despite potential decline

Assuming that the global spread of the COVID-19 pandemic continues to slow, TrendForce expects annual smartphone production for 2022 to undergo a slight YoY increase of 3.6% to 1.381 billion units. Not only is smartphone demand expected to decline in China, which represents the largest consumer market in the world, but other markets will also exhibit only limited growth. Hence, the leading growth drivers will come from both cyclical replacement demand and new demand from emerging markets. Notably, in addition to factors such as foundry capacity allocation, global inflation, and energy shortage, whether an economic recovery will bring about positive change for the smartphone market will continue to influence the overall performance of the industry. TrendForce therefore believes that the annual smartphone production for 2022 may still face potential downside risks.

Regardless, the recent war between Russia and Ukraine has generated a host of issues including exchange rates, inflation, and logistics problems that affect smartphone sales in Eastern Europe. With regards to the market share of smartphone brands in Russia and Ukraine last year, the top three brands by sales included Samsung, Xiaomi, and Apple, with a combined 45 million units sold, accounting for 3% of the global total. Preliminary assessments indicate that the ongoing war will not have a drastic effect on smartphone production for 2022, though TrendForce also does not rule out the possibility that the resultant global economic problems may affect overall smartphone demand.