Smartphone market shrinks: Buyers flock to used devices

The primary global smartphone market is anticipated to contract by 14.8% in 2026, driven by persistent memory shortages impacting production. This follows a 4.4% decline in the first quarter of 2026, despite earlier inventory build-ups. Entry-level smartphone prices have already escalated by over 50% compared to last year, making new devices less accessible.

As a result, consumers are increasingly turning to the refurbished smartphone market for more affordable options. Sales in this secondary market grew by 4% year-on-year during the first quarter of 2026 and are projected to expand by 15.4% globally this year. However, this surge in demand could also lead to higher prices for used devices.

The rising costs are largely attributed to memory components now constituting over 30% of some smartphones' bill of materials, exacerbated by high demand from AI data centers. The availability of refurbished phones largely depends on trade-in programs, with premium devices expected to drive supply. Countries with mature trade-in schemes are better positioned to benefit from this growing secondary market.