Early upgrades, trade-in behavior, ecycling impact mobile lifecycle
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Arlington, VA, September 6, 2016 – Exponential growth and broader adoption of mobile devices over the past five years have drastically impacted their lifecycle, creating new areas of market opportunity, according to a new Consumer Technology Association (CTA)™ report. The Mobile Device Lifecycle Metrics and Analysis Study says early upgrade and leasing programs are changing the game – and trade-in behavior, pre-owned device sales and ecycling are producing new opportunities in add-on services and accessories.
“The U.S. mobile market has dramatically changed over the last decade, since the launch of the smartphone,” said Brian Markwalter, senior vice president, research and standards. “The mobile device lifecycle has evolved to meet consumer demand for the latest mobile technology, creating new types of services and revenue opportunity.”
Changing Mobile Device Lifecycle:
- Early upgrade and leasing: Consumer behavior around the smartphone upgrade cycle continues to change over time due, in part, to carriers offering more dynamic plans with early upgrade and leasing options.
- Trade-in rates remain generally low: CTA research shows that about 30 percent of consumers have sold back, traded in or recycled a mobile device in the past. Consumers tend to purchase new devices and then keep them after the devices are old and no longer in use. The wireless industry is emphasizing trade-in and recommerce programs in order to encourage customers to easily and responsibly dispose of their old devices.
- Pre-owned device sales in emerging markets are a must: Reuse opportunity is strongest in emerging countries where demand is high for used, flagship phones. The pre-owned market in the U.S. remains flat, with 11 percent of mobile users using a pre-owned device and 35 percent of respondents expressing interest in purchasing a pre-owned device (down from 39 percent one year ago).
- Ecycling grows: Industry has responded to the need to increase recycling rates. Recycling and reuse rates for mobile devices have skyrocketed during the past few years as a model market-based solution for other industries to follow. For larger consumer devices, CTA’s eCycling Leadership Initiative recently announced a record-setting 700 million pounds of consumer electronics have been recycled under the program – showing the industry is recycling in record numbers for the fifth consecutive year.
- Add-on services will drive growth: With the gradual slowing of device shipments, the development of creative add-ons including insurance, warranty, repair, security and storage will develop to generate revenue.
- Accessories and Internet of Things devices: As the industry continues to transform and the device lifecycle lengthens, vendors will need to expand service offerings and lifecycle management support, especially as wearable accessories and the Internet of Things (IoT) evolve.
According to other CTA research, U.S. smartphones sales are projected to reach 183 million units in 2016, up five percent, while revenues will reach $55 billion (a four percent increase). Smartphones are still the dominant sales category in the industry, but 2017 will be the first year CTA expects to see a slight decline in unit sales and revenue.
The Mobile Device Lifecycle Metrics and Analysis Study was designed and formulated by CTA, the most comprehensive source of sales data, forecasts, consumer research and historical trends for the consumer technology industry. To download or purchase the report, or for more information, visit CTA.tech/mobilelifecycle.
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About Consumer Technology Association:
Consumer Technology Association (CTA)TM, is the trade association representing the $287 billion U.S. consumer technology industry. More than 2,200 companies – 80 percent are small businesses and startups; others are among the world’s best known brands – enjoy the benefits of CTA membership including policy advocacy, market research, technical education, industry promotion, standards development and the fostering of business and strategic relationships. The Consumer Technology Association also owns and produces CES® – the world’s gathering place for all who thrive on the business of consumer technologies. Profits from CES are reinvested into CTA’s industry services.