Most of the phones being traded in were released about five years ago.

Most of the phones purchased from customers as part of trade-in programs during 2023 were released about five years ago, market participants estimate. Among the most popular is the iPhone 11. Experts believe that trade-in operators, who repair surrendered equipment and return it to the market, have increased revenue but are faced with rising costs.

During 2023, customers of Inventive Retail Group (IRG; manages the restore chain and mono-brand stores of Samsung and Xiaomi), who traded in Apple phones, most often changed phones manufactured in 2018–2020, the company told Kommersant. Such devices account for more than 60% of the total volume. IRG noted that iPhones of the same generations accounted for the majority of trade-in buybacks in 2022: “We can conclude that the useful life of phones has increased by a year.” Among Samsung phones, more than 75% of devices traded in in 2023 were from 2019–2021 models; in 2021, the majority were phones from 2018–2020.

MTS clarified to Kommersant that in the fourth quarter, phones from 2019 were most often accepted for trade-in – they accounted for 22% of the total number purchased. A year earlier, the majority of phones traded in to MTS were also 2019 models, but their share in the total volume was 5 percentage points higher. The share of 2018 phones in the company’s trade-ins decreased over the year by 1 percentage point, to 20%, while the share of 2020 devices remained the same (16%).

The RosIndex Ipsos study (conducted among residents over 16 years of age in cities with a population of more than 100 thousand people, 4.9 thousand people in each wave of the survey) confirms an increase in the average period of phone ownership.

According to data available to Kommersant for the fourth quarter of 2023, 41.3% of respondents bought a phone more than two years ago.

This is 0.5 percentage points more than in the same period in 2022, and 5.3 percentage points more than in 2021.

About 80% of phones handed over for trade-in, after repair or replacement of the battery, are returned for sale as refurbished, explains Oleg Zhulev, commercial director of the profile aggregator Sivimart: “A fifth of them are handed over in poor condition – these devices are either completely broken or require serious repairs.” According to him, retailers and their contractors—operators of trade-in programs—are more interested in the technical condition of the phone, not its age.

Mr. Zhulev noted that the iPhone and flagship Samsung models, even after three or four years of operation, retain a high residual value: “In general, we are seeing an increase in the quality of devices and a more careful attitude towards them on the part of the owners.”

Sivmart explained to Kommersant that among the iPhones purchased from customers over the past six months, the majority were iPhone 12 (2020, 35%) and 11 (2019, 25%) series.

Previously, equipment sellers noted that against the backdrop of growing sales of discounted phones, it is the iPhones of these series that are most popular (see “Kommersant” dated February 3). As Arthur Makhlayuk, a business analyst at the Fplus holding, says, retailers compile a list of devices that they accept for trade-in, based, among other things, on the demand for refurbished models, “and iPhone 11 and 12 are still receiving updates to the current versions of the system.” Models that were released after 2022 are “more convenient and more profitable for their owners to sell directly on the secondary market than to trade-in.”

Trade-in operators “certainly increased revenue due to the growth of the market for refurbished devices, but were faced with rising costs for components for repair,” notes Telecom Daily CEO Denis Kuskov. He expects that after phone ownership periods increase in 2022-2023, they can be expected to decrease in 2024, including due to interest in new brands.

At the same time, Mr. Kuskov believes that the iPhone 11 will maintain a strong position in the discounted equipment market until system updates are stopped: “The phones in this series are quite high quality, and many of them were released on the market. We are talking about an anomaly – the iPhone 6s and the first generation iPhone SE were just as “long-lived” in their time.”

Yuri Litvinenko