The Used Smartphone Market: A Pillar of Apple’s Economy

Beyond selling new iPhones, Apple also profits from the second-hand market, earning $72 annually per user, which helps attract and retain new customers within its ecosystem.

An Essential Revenue Source

Apple, renowned for its iPhone lineup, doesn’t solely rely on new sales for revenue. The tech giant also profits significantly from the used device market and related services. According to Morgan Stanley, Apple earns approximately $72 per user annually from this sector.

The Power of the Used Market

The scale of the used market is substantial. In 2023, IDC estimated this market to be worth about $72.9 billion, with nearly 195 million used smartphones sold. Leading brands like Apple and Samsung are major beneficiaries of this trend, which is expected to grow to 257 million used smartphones globally by 2028.

The Valued Price-Quality Relationship by Consumers

In the secondary market, users prioritize the device’s residual value, cost, and battery life. An increasing number of consumers are choosing affordable smartphone options. By purchasing used devices, they access cutting-edge technology at a fraction of the original price, reducing financial burden and extending the device’s lifecycle.

A Boon for Manufacturers

The secondary device market benefits not just consumers but also manufacturers like Apple. They can acquire older models in exchange, refurbish, and resell them through their channels or partners. This enables Apple to sell the same device twice, creating additional revenue streams.

The used device market serves as a bridge to a broader customer base for Apple’s platforms. It also presents Apple with a great opportunity to draw new customers into its high-margin services. Long-term, users entering Apple’s ecosystem through second-hand devices are likely to remain brand loyal, eventually purchasing new hardware when possible.