Rethinking Growth in Devices: Embracing Refurbishment to Win

By Ethan Choi, Dongwhan Lee and Changwook Kim

The behaviour of upgrading devices every year is over. Simply adding a higher number to a device no longer has the same appeal as it once did. In today’s fast evolving smart devices market, traditional growth engines are plateauing, and they are not expected to have another sharp leg higher. Rising average prices of flagship smartphones driven by high-end devices like Pro/Pro Max and Ultra, have shifted behaviour among increasingly cost-conscious consumers. Premium devices are now prompting longer-term purchasing cycles and refurbishment, fueling a changing dynamic for device makers that cannot be ignored. Indeed, change is happening at such a rapid rate that refurbished devices are projected to have 20% of the device market in 2025.

Millennials and the Younger Set

While more seasoned device buyers have frequently sought the newest model, younger generations are less interested in (diminishing) bells and whistles, and have a thirst for experiences and a degree of practicality. Such trends are already evident in other categories — notably luxury goods, where the second-hand market has grown quickly. The younger cohort’s interest in the device refurbishment market, as opposed to always seeking the latest device, underscores the need for device makers to more aggressively incorporate refurbishment into their development ecosystem.

Market at an inflection point

This shift in the marketplace has been some time in coming. From 2021–2025, the new smartphone market remained flat in CAGR, indicating a clear slowdown taking place. Customers are re-evaluating what they value in a device with services and ecosystems taking precedence over raw hardware specs. Moreover, the impact of advanced models has steadily diminished. Lastly, sustainability efforts of organizations are also front of mind with many cost-sensitive buyers seeing refurbished devices as a viable alternative to new devices.

In a sense, device makers are a victim of diminished returns. Consumers keep older devices longer and a refurbishment market has steadily gained share, especially among models one of two generations old. The trend of “reasonable consumption” — keeping devices longer and tapping the refurbishment market looks increasingly like a permanent shift, not a passing fad.

How can device companies adapt to this new purchasing paradigm?

The strategic response is to embrace the refurbishment ecosystem. Refurbishment is rapidly moving from a secondary position to a first choice. Inevitably, the rise of refurbishment, coupled with keeping devices longer, will only accentuate the new device sales plateau that began in 2021. Forward-thinking device companies must establish robust internal refurbishment ecosystems to remain competitive.

We have identified four core pillars to build a successful refurbishment strategy:

1) Develop a product lineup strategy that combines both new and refurbished phones

Unlike the early 2020s, consumers now increasingly focus on price and value. This becomes a thornier issue as high-tiered refurbished models and mid-tiered new phones are priced similarly. Device companies need to closely monitor price and supply trends in the refurbished device market to mitigate the risk of cannibalizing their new phone sales. They can also reposition product lineups to clearly differentiate between new and refurbished models in both price and specifications.

Beyond designing a product lineup that spans both new and refurbished phones, companies need to establish a highly detailed market monitoring system in order to track sales trends by price tier across a wide array of geographies. With this pricing insight, device makers can fine-tune their promotional strategies — giving them the pricing intelligence to adjust when it’s right to emphasize new devices versus refurbished models in each price segment. This will minimize cannibalization and maximize overall revenue from both categories.

2) Build a Global Refurbishment Network

From collection to resale, a global ecosystem for refurbishment is essential to build and maintain sales momentum.

Key markets like the U.S. and E.U. are the main suppliers for the refurbishment cycle. From those large markets, devices meant for refurbishment are exported to global/local hubs for inspection and repairs.

Hubs in Hong Kong and Dubai serve as preferred repair and distribution centers due to their strength in logistics and infrastructure. Local distribution hubs can be used for inspection and minor repairs, but global repair hubs can manage major volumes and act as the export/import medium for global re-distribution.

Markets like China, SEA, LATAM, and Middle East are more immediately receptive to refurbished devices. Understanding how target demand markets purchase new and refurbished devices is crucial to sales success. Companies must work with specialized local distributors or ecosystem partners to drive local market sales and increase market intelligence.

3) Drive Efficiency in Refurbishment to Maximize Trade-In Value (TiV)

Cost effective repairs are foundational to the refurbishment market. Leveraging existing supply chains to source parts and building specialized refurbishment lines can improve efficiencies in the refurbishment ecosystem. These efficiencies, along with the removal of the middleman, lowers the cost to refurbishment which can be passed back to the customer as a higher Trade-In-Value without sacrificing profitability.

4) Create the Loop: Sell, Trade-In, Refurbish, Resell

A successful refurbishment business isn’t only about the resale but the full sales cycle. Offering higher Trade-In-Value increases the perceived value of the device at every point in its life. Linking this with an integrated ecosystem that collects, grades, repairs, and resells devices generates a loop of recurring value for the company and the customer.

Summary

The device market is changing in significant ways. Consumers seek value, longevity, and sustainability, not just new devices. For device makers, this means evolving from a singular focus on new hardware to a lifecycle-first strategy. Successful companies in this new device epoch will embrace refurbishment and resale as part of the overall growth engine.

Companies that will win are those that own the full lifecycle of their devices. That will give them the ability to deliver greater value through trade-in-programs, while investing in the ecosystem to support the global circular device economy.