Secondhand phones sales are booming - relatively speaking - and the industry has rising inflation, AI bloat, and consumers' growing apathy toward overpriced new handsets to thank for it.

Counterpoint Research forecasts a 12 percent year-on-year bounce in pre-owned handsets in 2026.

Phone users know when to hold 'em, delay upgrades amid inflation [1]READ MORE

"There's always been a demand for pre-owned devices, but over the past few years the demand has become more mainstream," said senior analyst Emily Herbert. "OEMs, operators and retailers have invested more in this space, and consumers have become more comfortable buying used or refurbished smartphones."

The new device market, meanwhile, is in serious trouble. AI-driven memory price rises had already pushed up the [2]cost of manufacturing new smartphones before the conflict in Iran sent inflation surging across essentials. The result? Counterpoint expects new smartphone shipments to crater by 12 percent this year, potentially dragging the market below 1.1 billion units.

"It's an even higher drop than we saw during covid or during the inflation-driven slowdown in 2022 to 2023, and if this plays out, shipments could fall back to levels that were last seen around 2013, about 13 years ago," Herbert says.

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There's no quick recovery in sight either with demand expected to stay weak through 2027, pushing any rebound to the following year at the earliest.

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"Even the recovery that's expected in 2028 will be limited compared with previous cycles because there is a structural issue in the market that is changing the dynamics," Herbert warned.

"We're seeing replacement cycles are getting longer. Consumers are now holding on to their devices for more than four years. In many markets, there are also fewer players, fewer launches, and just more overall consolidation, and at the same time, growth is becoming more dependent on premium devices, especially as OEMs focus on device AI and higher end hardware capabilities," she said.

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That shift creates an awkward paradox for the secondhand market, which ultimately depends on people trading in their old handsets. If consumers are hanging on to devices longer, fewer phones flow into the refurbished ecosystem threatening to choke the very supply chain that the surging demand for pre-owned devices requires.

"Demand for pre-owned devices is likely to increase," said Herbert, but the "supply could become more constrained, and that is why idle devices are such an important opportunity."

[7]Secondhand laptop market goes 'mainstream' amid memory crunch

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[9]Apple iOS 26 set to dump 75M iPhones on the e-waste pile

[10]European consumers are mostly saying 'non' to trading in their old phones

[11]Green recycling goals? Pending EU directive could hammer used mobile market

The answer lies in the hundreds of millions of phones gathering dust in kitchen drawers around the world.

Counterpoint counted more than 600 million idle devices last year - phones whose owners upgraded but never bothered to trade in - compared to 338 million that made it into the refurbished pipeline.

Tapping it won't be straightforward, however. The research biz found growing willingness to buy refurbished devices. "In India and the UK, around 60 percent of respondents said they would consider buying refurbished for the next device," Herbert said of her survey.

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The pre-owned market is no longer a sideshow, it fast becoming a pillar of the global smartphone industry amid pressure on the new device sector.

The challenge is whether the industry can access enough devices, process them efficiently and cost effectively, and recirculate them back into the market at a scale able to make up for the lost new device sales. ®

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[1] https://www.theregister.com/2026/04/30/phone_buyers_opt_to_wait/

[2] https://www.theregister.com/2026/02/26/memory_price_hikes/

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[7] https://www.theregister.com/2026/02/16/refurbished_pcs_memory_crunch/

[8] https://www.theregister.com/2025/09/09/gartner_ai_phone/

[9] https://www.theregister.com/2025/09/02/apple_ios_26_waste/

[10] https://www.theregister.com/2025/06/18/used_phones_europe/

[11] https://www.theregister.com/2024/09/20/secondhand_smartphone_demand/

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[13] https://whitepapers.theregister.com/