Samsung seems to have had the best second quarter income since the early months of 2014 and the sale of refurbished phones may boost their sales to an even higher level. This was primarily due to the sale of the S7 and S7 Edge smartphones of the Samsung Galaxy series as well as due to the low to mid- ranged pricing of their smartphones.
Reuters however believes that that Samsung entering into a resale program could interfere with their business goals. “The risk of offering refurbished devices is that they could potentially cannibalize sales of Samsung’s other mid-tier devices,” said Reuters.
By early 2017, Samsung plans to sell refurbished smartphones which are returned on the basis of a one-year upgrade program. This will help them to raise their market sales which suffered a drop in general and will also be tough competition to the Chinese phones which are available for cheap prices. However, Samsung has not neither divulged the method of refurbishing the phones nor the price structure.
Research shows that the average resale price of a refurbished Samsung Galaxy phone is approximately 51% of its cost price at the time of purchase. The Apple iPhone however, shows a higher resale value of about 69% of its original price. However, Apple does not give any information regarding refurbished iPhones.
The auditing and advisory consulting firm, Deloitte, referred to the sale of used smartphones as “the $17 billion market you may never have heard of.”
It predicted a sale of around 120 million used smartphones in 2016 as compared to the 80 million sold in 2015. Deloitte noted that smartphone vendors gain several benefits from a strong resale market like encouraging smartphone owners to replace their devices with new ones, which boosts vendor revenues. A stable second-hand market also makes devices at affordable rates for buyers on lower budgets. Manufacturers thus, do not have to create “less profitable, budget variants of their devices,” Deloitte added.