B-Stock Mobile Experts Discuss Secondary Market Trends

Every year, mobile device sales fluctuate. New technologies are introduced into handsets, supply chains and production slow down or improve, and other major and minor economic factors affect the mobile environment. Naturally, there is a trickle-down effect in the secondary market.

As the first half of the year draws to a close, we asked Joe Dube, B-Stock’s Director of Mobile Accounts, a few questions about the state of the mobile secondhand market over the past few months and what sellers can expect in the coming months.

In your own words, what are your thoughts on the current mobile secondary market?

“What’s notable at the primary market level is that the major carriers in the United States are slowing the pace of mobile phone upgrades. According to a recent report from AT&T,Mobile equipment sales fell 8% in the April-June period, despite some indicators such as subscriber additions beating estimates. The primary market sales were down significantly, and secondary market volumes were down. This is simply due to fewer trade-in devices and customer returns being returned to carriers.

Secondary market device buyers are constantly looking for inventory, but the largest sources of supply (typically the major carriers) are the limiting factor here. This has led to some interesting trends across the marketplace. In the early to mid-Q1 2024, used devices generally depreciated at a rate of about 2-4% per month, followed by a slight decline in prices later in the quarter. More recently, prices have been stable, with many top-performing models selling for the same price they sold for at the beginning of the year. In fact, average selling prices recovered and even rose slightly in Q2 due to tight supply.”

Can you elaborate on why new device sales are down?

“There are a few reasons for this. Following the launch of the iPhone 12, the first 5G Apple device, the industry saw a particularly long and strong period of sales performance that analysts have called a “supercycle.” The generations that followed were very similar to the iPhone 12 in both features and form factor, giving consumers little compelling reason to upgrade. Additionally, the devices are expected to last longer than ever, thanks to improved physical durability and extended software updates.

The last thing to add is that carriers have extended the standard lease or payment period for the device. Now consumers can get a lease of up to 36 months. Keep in mind that many customers are unwilling or unable to upgrade until their current device is paid off, compared to the 24-month period it took to pay off a mobile phone in previous years, and now that period is around 3 years.

With all these factors at play, many other players in the secondary market are feeling the squeeze in some way. With inventory shrinking due to the factors we just discussed, all the resellers, processors, and marketplace facilitators are in the same boat.”

In this environment, what recommendations would you make to mobile OEMs and carriers looking to leverage secondary market sales channels?

“If you have inventory, this is a great time to be a seller. Again, supply is tight, demand is rising and prices are rising. Companies with trade-ins or excess inventory are encouraged to sell as quickly as possible to make the most of this high-demand period.

In many cases, you’ll see that B2B pricing is competitive with B2C pricing, so there’s a huge advantage to selling in bulk, as transaction costs are significantly lower and operational headaches are reduced.”

What is the outlook for the secondary market from now until the end of the year?

“Players in the secondary market need to remain sensitive to what carriers and OEMs are doing and how their devices are performing.

It’s safe to say that Apple’s September iPhone event will provide Apple with more details about the new devices and more information about the Apple Intelligence the market is expecting. But we’ll have to wait and see. Apple is betting a lot on this new feature set, and it’s unclear whether consumers will actually find these AI features desirable and useful enough to drive a larger upgrade cycle than we’ve seen so far.

For B-Stock, especially new releases, we are uniquely positioned to help move trade-in inventory quickly and with high returns because of our strong network of buyers. With thousands of business buyers on our marketplace purchasing devices in all lot sizes and conditions, even if we have weaknesses in certain device subsets or in certain geographies, today’s largest OEMs and enterprise sellers, including carriers, will continue to benefit from a truly global network of buyers, ranging from very small business buyers to the largest and most influential companies.”

Is there anything you need to tell mobile OEMs and carriers right now about the state of mobile sales?

“Another topic to watch is the increasing level of automation being used in the mobile secondary market. This includes software for grading and diagnostics, and robotics for repair and remanufacturing.

From a processing standpoint, there is clearly increased efficiency, but the biggest benefit comes in the form of improved market transparency at the auction stage. Automation and robotics reduce subjectivity in ratings and increase confidence in the functionality, allowing buyers to bid very aggressively and ultimately get their money back to sellers faster. This technology has been taking off in the last few years in particular, and as the market matures and everyone sees the benefits, it will only become more widespread. If you or your partner haven’t invested in it yet, it’s something you should definitely look into.

Finally, all stakeholders in the secondary market may wish to follow: Recent FCC Proposals This requires carriers to fully unlock their customers’ devices within 60 days. This regulation ensures that all used devices sold on our marketplace are free of network restrictions that affect the end user’s ability to use their device where and how they want. For the secondary market, reducing carrier and OEM restrictions and opening up the market is generally a good thing for everyone.”

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Watch the latest B-Stock Mobile Insider edition to learn more about mobile secondary market pricing data and trends for specific top performing models in Q2 2024.

To learn more about our resale solutions for mobile phones and other devices or to schedule a demo, visit our website today.