Certified Pre-Owned Report
- Strong year for CPO: An estimated 11% of U.S. consumers are on a pre-owned smartphone, and 30% of these users own a certified (manufacturer or non-manufacturer certified) model, up 3 pts from last year. The expansion of reverse logistics centers should help the certified phone market gain additional momentum in 2025.
- Consumers to remain frugal in 2025: While the declining interest rates will open up consumers’ discretionary wallets in 2025, ongoing inflation (and possible extra pressures from tariff wars) could drive prices higher, thus pushing price sensitive customers over to affordable options such as CPO models.
- Older generation supply diminishes CPO appeal: With average device age reaching record-high levels, the supply side of the pre-owned market will suffer in the coming years as many of the traded-in devices will be over 3 years old. The fact that many grade A devices are routed to insurance claims and the ongoing interest from international markets due to higher margins, the CPO supply in 2025 could be limited for consumers.
- AI interest is tempered: Despite heavy marketing, awareness and interest level for AI features on smartphones have not yet skyrocketed. Users continue to prioritize fundamentals, thus giving the CPO market an extra opportunity for growth in 2025.
- Battery, battery, battery: As in the previous years, smartphone battery performance continues to top the charts in all related questions. 70% of pre-owned buyers are aware of battery replacement programs and almost two thirds show interest getting their batteries replaced instead of getting a new phone.
- Apple grows share in CPO: Apple has a strong lead in the US smartphone market, and its growth trajectory is no different in the CPO space due to “buy online, pick up in store” at retail. As in the previous year, we expect Apple to further grow its CPO base thanks to its direct-to-consumer program.
- Prepaid carriers getting serious about CPO: Verizon, which is the only major carrier to run a CPO program, has built a strong lineup of CPO iPhones for its new generation prepaid brands including Visible and Total Wireless. Samsung inventory remains more limited, posing an opportunity for growth.
- Kids market still promising: Brand new devices account for almost 90% of the total market but 40% of kids get a pre-owned smartphone as their first. Android is top choice for most of the market (including some iOS households) due to cost. The Android-to-iOS migration challenge, however, remains.
- Not everyone can afford flagships: More than half of pre-owned customers plan to spend less than $500 for their next phone, and as much they would like to get their hands on a pre-owned flagship, it may still be out of their reach.
- Sustainability marketing paying off: Pre-owned buyers’ sentiment towards sustainability is at all time high thanks to brands’ eco-friendly marketing.
