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Mobile News Xpo 2020: Used sector could soar with a recognised grading system

Paul Lipscombe
March 23, 2020

CCS Insight’s Kester Mann moderated a session that discussed how the used device market is coming of age now that the stigma of people using second-hand phones has abated 

The market for recycled phones can grow if the industry agrees on a universal grading system, according to speakers on the Refurbished Device panel at this year’s Mobile News XPO. 

CCS Insight director of consumer and connectivity Kester Mann moderated a packed-out, standing- room-only session. 

He was joined on stage by Mazuma Mobile MD Craig Smith, Bastion Insurance sales director John Fannon, Mobio Distribution founder Josh Harrison and Blackbelt MD Harby Garchay. 

In a recent CCS Insight survey of 1,000 people, 60 per cent of respondents said they would now consider buying a refurbished handset, with an estimated 2.6 million units sold last year in the UK. 

Nonetheless, those on the panel still believe there are ways to improve this market segment, most notably around the grading of devices. 

Universal grading 

“We need universal grading to come in,” said Smith, citing a number of companies that had graded their smartphones in different ways. 

“It would be good to see the industry as a collective come together and agree to a universal grading system. I think this will take the industry forward,” he said. 

Fannon, who noted an uptake in customers wanting insurance for used smartphones, added that it would be good to “get to a point where we can all agree on what a ‘Grade B’, for example, means – while an A grade should be indistinguishable from a new phone.” 

Harrison said that access to original parts from manufacturers is a barrier to this. “Many repairs are carried out by using aftermarket parts. Access to OEM parts is proving difficult or not possible. This is a potential barrier that stops people from buying used phones, as consumers question the quality of the parts being used.” 

Cost is a key reason why customers and businesses are considering recycled phones, he added. 

“Lack of innovation [in the latest devices] has been a major factor,” he said. “But cost has probably been an even bigger one now that we’ve got to a point where flagship models are more than £1,000 – a price point which is too much for most customers.” 

There has also been a growing acceptance that used kit is as reliable as a new phone, with Smith saying that there’s “less of a stigma now”. 

Fannon recognised that businesses were becoming more likely to opt for second-hand phones than previously before. 

“Cost is a huge part of it,” he said. “There’s now much more acceptance [among businesses in buying] these handsets. 

“It saves them money and there’s no disadvantage to buying a used phone, particularly in the B2B world.” 

Blackbelt’s Garchay said there were more assurances for consumers when buying used devices now. 

“People are getting better paperwork with used phone, which helps to give them confidence in what they’re buying.” 

The 5G effect 

During the 45-minute session, there was also a discussion on whether the growth of 5G would ultimately boost the recycled sector as users start trading in older phones to upgrade to the latest technology. 

“This will come with time. 5G is still fairly new, but I expect there could be a lot more demand as refurbished phones become cheaper,” said Fannon. 

Smith added: “I think 5G will affect the used market in some way, but it’s all dependent on the uptake in 5G, which has been pushed heavily by networks. We hope the demand for 5G is strong and therefore can spur the second-hand market to grow.” 

Smith also called for repairers and distributors to have easier access to official parts. 

“Having the ability to access the right parts to ensure there is a quality product is important,” he said. “There really needs to be a ‘right to repair’, even if the OEM manufacturers don’t want this.” 

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