Buying Used Phones

Buying Used Phones
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Despite the fact that smartphone prices, at least at the high-end, peaked out last year, smartphones are still expensive and even more expensive for smartphone brands to get rid of when they are traded in for new models.  In the US ~350,000 smartphones are disposed of EACH DAY of which only 15% are recycled.  Since 100% of all smartphones are repairable or recyclable, this leads to an enormous amount of waste being added to the planet, and these numbers are only for the US.  Looking at just a few of the recoverable materials in smartphones, we put together a table showing the value of four such materials based on the recycling of 1m smartphones.  Here’s what it looks like:

So making the case for recycling smartphones is an easy one to make, but most smartphones that are traded in can be repaired or refurbished, and that has become a big business for smartphone brands, particularly Apple (AAPL) who has a 44% share of the refurbished market and Samsung (005930.KS) who has a 20% share.  In fact Samsung has selling refurbished phones in the US and Europe on a limited basis since 2018, but has now undertaken a plan to expand its refurbished smartphone business by branding such phones as ‘Certified Used Phone’ and putting each potential certified phone through a battery of over 100 tests and inspections, along with a new battery and packaging, along with a 1 year warranty.
Samsung has set up a separate section on its US website for ‘Certified Re-Newed’ product and is selling over a dozen such models at substantial discounts, with some being offered as replacements for new units of the same model that are out of stock.  Here are a few examples:

​While we believe some of the motivation associated with refurbished smartphones is for the good of the planet, it also serves as a profit center for phones that have been turned in as part of smartphone brand upgrade discount programs.  Rather than recycle a phone, which has a holistic benefit, a refurbished phone generates a return, and brands capitalize on that holistic view on social media, while still making a profit on returned phones, and those who are willing to work with a 1 year warranty, which is not much different from many new phones, the discounts are quite appealing, especially if you are one of those who lose phones or tend to shorten their lives by not purchasing a protective case.