Refurbished mobile specialists Envirofone and The iOutlet have been named Recommended Providers in the latest Which? survey of the UK’s best second-hand and refurbished tech retailers.

The consumer watchdog gathered feedback from more than 2,400 consumers, covering over 4,000 purchasing experiences across the UK’s growing used tech market. Retailers were rated on value for money, customer service, delivery, communication, product accuracy and range. 

Brands needed an overall customer score of at least 80 per cent and four stars or more for both value and service.to achieve Recommended Provider status, 

The iOutlet co-founder Matt Green said: “This recognition from such a trusted consumer organisation is a huge endorsement of the hard work and standards we’ve built over the years. Refurbished technology has become a real alternative to buying new, and this acknowledgment highlights the trust our customers place in us.”

Envirofone Director Sam Hargreaves added: “It’s a real endorsement of the standards we set for quality, customer service and sustainability. Recognition from such trusted consumer voices reinforces our commitment to making refurbished tech the smart, reliable choice for everyone.”

The Which? results reflect growing consumer confidence in refurbished smartphones and second-hand devices as credible and sustainable alternatives to new handsets.

Around 200 refurbishers, distributors, retailers and service providers will be discussing the future of the secondary mobile market will be under discussion at Circular Summit next Wednesday (October 22) at The Hilton Tower Bridge, London SE1. Click HERE to see who’s coming and to attend.

Green co-ounded The iOutlet 15 years ago as a bedroom start-up, while Hargreaves launched Technology Recycle Group, which was later acquired by ReBuy.

SK TES had previously acquired the assets of the defunct recycler Redeem Group, including Envirofone.

Envirofone was one of the UK’s first large-scale trade-in providers. Its new management aims to re-establish it as a leader in European recommerce.

“Matt remains a director of both Envirofone and The iOutlet,” said Hargreaves. “The structure allows each brand to pursue distinct strategies with Envirofone focusing on trade-ins, while The iOutlet continues as a resale platform.”

Envirofone currently processes around 40,000 devices annually. The new team is targeting a 30 per cent uplift, with all grading and refurbishment to remain in-house.

“We will be promoting our brand, which carries a sense of nostalgia for users. We will pride ourselves on price and service, with every part of the process managed in-house,” Hargreaves said.

The strategy will emphasise direct-to-consumer trade-ins rather than wholesale partnerships. “Staying direct to the consumer allows us to offer maximum value,” Hargreaves added.

A European relaunch is set for the second quarter of 2026, in countries where recommerce adoption is accelerating fastest.

The duo that founded The iOutlet have sold the business to its management team.

Matt Green and Liam James, who founded James Green Ltd the company behind The iOutlet in 2012, will however remain involved with the company.

The tech refurbishment firm has sold close to £100million worth of products during this time, to both retail and wholesale customers.

And recently the online retailer relocated to a much bigger warehouse in Mid-October.

Green and James have sold the company to Lewis Cox, Ollie Green, Greg Jones and Russell Jones as part of a management buyout.

The acquisition was advised by the corporate finance team at PKF Francis Clark, who supported James Green’s shareholders in structuring the acquisition and securing a cash flow loan facility from Santander.

In a joint statement, Green and James said: “Having worked tirelessly to develop The iOutlet into the business it is today, we now have an established brand for the management team to continue with the next stage of our development growth plans.

“The team, led by Lewis Cox and including Ollie Green, Greg Jones and Russell Jones, have been integral to the success and growth of the business over the last few years and getting to this stage.

“We believe that the flexible funding structure provided will enable the team to achieve the desired growth ambitions, and we very much look forward to working with them going forwards.”

Lewis added: “They have worked tremendously hard to develop The iOutlet into a leading multi-channel retailer of refurbished phones and we are excited at the opportunity we have been given to continue to grow the business they have created.”

Online retailer The iOutlet has relocated to a new warehouse as part of long-term plans to boost productivity and continue expansion.

The Plymouth-based business specialises in selling refurbished phones, tablets and laptops.

The company has now moved to Sisna Park, located in the north of Plymouth and in close proximity to its previous HQ.

A key factor behind the move is the company’s ambitions to continue expansion. The new location 14,500 is square foot, compared to the previous premises which was 3,800 square foot.

The move was completed in mid-October, with co-founder and director Liam James saying it was a seven-figure investment.

Commenting on the move, James said that the business has already seen the benefits of its new bigger workspace, after a strong seasonal period.

“It got to the point where we needed to move on and expand into a bigger premises and this proved to be the perfect time for us,” he said.

“There’s more room for staff to work and this boosted productivity. Black Friday just gone was a key indicator of this, it was so much calmer compared to the old premises where sales numbers were smaller.”

Productivity has also benefited with the bigger premises allowing for better social distancing practices to be applied.

“The new location allows us to continue working safely during the pandemic as we have the space to the allow the staff to space out, whereas in a smaller unit we would need to split the teams into remote and on-site.”

Record sales

According to James, The iOutlet had its best ever Christmas period, with online sales exceeding £1.2 million during November for the first time.

And when asked about the impact of the coronavirus pandemic, James said the company has been able to perform better than expected.

“We’ve seen a massive upsurge in sales over the pandemic, we’re in an industry which has been impacted in a positive way during the last year as people have needed tech products.

“People are working from home and needing to get their bigger desktops or computers for Zoom calls and a lot of people have been buying smartphones.”

The company has also been able to secure a steady flow of stock during the last few months and appointed three new people to work on the computer side of the business.

The decline in new smartphone shipments was well-documented even before Covid-19 struck. Across the board, analysts spent the turn of the new decade predicting a global market that would either remain fairly flat or decline slightly this year.

Then, as lockdowns started to take effect across the world, these predictions nosedived. CCS Insight’s most recent prediction from April forecasts a 13 per cent dip globally this year, while IDC anticipates declines of 10.9 per cent and 12.8 per cent in Western Europe and the UK respectively.

What wasn’t so clear, however, was how the situation would impact on the used device market. This January, IDC estimated that worldwide shipments of used devices increased 17.6 per cent year-on-year in 2019, amid a wider forecast that projected the segment  to have a compound annual growth rate of 13.6 per cent from 2018 to 2023.

Naturally, this assumed strong – or at least predictable – economic conditions, something for which Covid-19 has shown little regard. Speaking to figures in the wholesale used phone distribution and consumer trade-in sectors, Mobile News has found a mixed but ultimately steadfast response to the pandemic in the UK, with the closure of physical retail and operator stores providing opportunities as well as challenges.

Wholesale

Wholesale seems to have borne the brunt of the downturn induced by lockdown. Distributors that take on operators’ and retailers’ used stock found their supplies diminished due to store closures.

“The pandemic has had a clear and obvious effect on the supply of used devices here in the UK and globally,” says PCS Wireless president for Europe Fergal Donovan. “We are seeing a lot less supply due to fewer phones being traded in and returned to operators and retailers. For the secondary market to function, there needs to be a consistent supply of devices coming into the system – and with supply numbers down, the secondary market is suffering.”

Drummond Corporations managing director Phil Drummond agrees. “Stock availability has dipped,” he says. “We’ve been unable to buy the usual quantities.”

Yet not everyone has encountered difficulties. Mobile Distribution managing director Chris Taylor says his business has “never been so busy”.

“Our turnover for March and April was astronomical compared to the year before,” he adds. “We didn’t have a supply chain impact at all.”

Phoenix Cellular’s director Paul Walters also reports solid business, with preparation for Black Friday already under way: “Thanks
to our numerous global supplier networks, we are still able to report a stable supply of stock to support our key customers.

“We are finding in some cases that customers are already buying stock for Black Friday, which is once again fast approaching. We are asking our customers to send us forecasts for the Black Friday and Christmas periods so we can guarantee stock availability.”

Although volumes in the overall mobile device market have suffered, tablets have seen growth, with the larger screen size
suiting remote working.

Strategy Analytics forecasts continuing growth in the sector, which already increased globally by 17 per cent year-on-year.

“The secondary market for tablets has definitely grown over the past few months as consumers and businesses have equipped themselves for working from home and communicating better with colleagues, friends and loved ones,” says Donovan. “This is visible across multiple brands and formats.”

Direct Benefit

While wholesalers have been affected by the decline in physical trade-in at operators and retailers, trade-in companies that buy direct from consumers have seen an uptick in business.

Although it seems likely that mobile trade-ins have seen an overall annual decline due to closure of physical operator and retail stores, big players in the space that don’t rely on a physical presence have reaped the benefits of reduced competition – and not just from the operators.

Envirofone, for instance, stopped operating in March before parent Redeem went into administration in July, prior to relaunching last week under the ownership of TES.

Mazuma Mobile has not only broadened its portfolio to incorporate laptops, tablets and games consoles, but managing director Craig Smith says that the firm’s mobile business has also grown year-on-year: “With people being at home, they’ve had time to do business with us, so our volumes have increased.”

Rochdale-based I Need A Mobile has also seen increased levels of selling from consumers, based on daily benchmarks. CEO Kasim Javed says purchasing is normally split 50:50 between wholesale and consumer, but he started to promote the latter when lockdown started as he knew that wholesale would take a hit resulting from the non-existent supply from physical retailers.

“We were expecting a surge online,” he says. “We’ve been on and off in the past few years with the consumer side because we found it cheaper to buy bulk and sell, but I wanted to have a contingency plan. The big suppliers we buy from that have network partners suffered because they are relying on walk-in trade-ins from network shops.”

Jon Miller, chief commercial officer at musicMagpie, also reports an annual increase in mobile volumes on the back of customers getting increased exposure to the brand through staying at home and being online more. “Physical retail wasn’t open, so people who may have used network stores or Carphone stores weren’t able to go to them,” he says.

“We’ve certainly found that there’s been a benefit in terms of more people going online, and that’s helped us to continue our growth curve.”

Miller also notes that the extended time spent at home may have spurred people to get rid of old devices, trading them in not to help fund a new purchase but to clean out old tech.

A commonly cited 2015 figure from environmental think thank Green Alliance indicates that there are 125 million unused phones sitting unused in UK households.  This number has almost certainly changed, but Miller believes there is an increased awareness of the value of used tech that, coupled with an increasing comfort with online transactions, has fuelled trade-ins.

“You ultimately need new devices to feed trade-in, but there’s a huge untapped pool of used devices sitting round in homes and offices,” he says. “Although we do a lot of trade-ins for iPhone 11s, and Galaxy S20s, there’s still a huge volume of iPhone 7s and 8s, and Galaxy S8s and S9s.”

Increased exposure to third parties promises to have long-term benefits for consumers, who find they tend to offer better value than the networks and official vendors.

Recent data from CompareMyMobile found that the average third-party trade-in prices for iPhones going from the XS range down to the 6S were all better than Apple’s official pricing – with differences for newer devices often being up to £100.

New Rivals

The shift in business to online hasn’t just benefited the incumbents; other players are sensing an opportunity and launching their own consumer trade-in set-ups.

Drummond Corporations had established its consumer offering, Sell My Cell, last year, but only properly launched it this May – a move that Drummond directly attributes to the market conditions brought on by Covid-19 that necessitated an expansion from just wholesale: “With the limited stock levels, we had to start coming up with new ideas.”

Matt Giles, who runs Telford-based corporate tech recycler TradologyUK, launched consumer trade-in site PreLovedTech on September 14. His four-strong workforce already accepted
consumer trade-ins via quotes on Tradology’s site, but he says Covid brought forward the launch of PreLovedTech after lockdown brought on the closure or cost-saving measures of his business and education clients.

In comparison, he viewed the consumer segment as “thriving”. “We had planned to launch [PreLovedTech] at the back end of next year, but we found business naturally migrating to the consumer  industry because businesses and schools have shut down,” he says.

“The corporate market was slowing down as it did for everyone, but the consumer market was buoyant, with lots of people working from home or being furloughed and wondering how to generate some more money.”

Despite the riches enjoyed by the established recycling players, Giles thinks there is an opportunity for a nimble smaller company to carve out its own customer base: “Our research says people make their trading decisions based on price, and we haven’t got the overheads the big players have got – so we’re able to offer slightly more value.”

Refurbished Apple products retailer The iOutlet also launched a trade-in proposition in May, with director Matt Green and his team starting to develop the service during lockdown when they saw the shift in market patterns.

“We were always thinking of going into consumer trade-in, but the opportunity was really born out of Covid,” he says. “We had previously bought stock from Redeem – and once it shut down, we decided to get our own recycling up and running.” The iOutlet also buys from Brightstar, which has encountered difficulties due to operator and Apple store closures.

As it is the company’s debut year for consumer trade-ins, Green has no point of comparison to gauge turnover, but he says he is pleased with current results.

Looking ahead

While it seems that the used device sector has found a level of stability in the months following the initial lockdown, the future is murky.

With the furlough scheme set to expire at the end of October, and local lockdowns increasing amid rising cases, uncertainty prevails. Despite seeing broadly similar trade to last year, I Need A Mobile’s  Javed has noted monthly declines.

“April was busy, May was less busy, June was less busy, July was less busy, August was less busy, and September hasn’t really picked up,” he warns. “It shows that the true effects of Covid come in after a few months, so it’ll be interesting to see what happens.”

However, PCS’s Donovan is more upbeat, as retailers begin to reopen and the economy tentatively starts to find its feet. “The frequency of relevant auctions is growing and the volume within these auctions is also growing, which is a good sign that things are getting back to normal,” he says. “Coupled with the fact that retailers are beginning to reopen, we expect to see the supply of pre-owned devices grow again.

“There is still some way to go to get back to pre-Covid levels, but there are clear signs of things getting better.”

Devon-based online retailer The iOutlet has launched its first ever TV advertising, as part of the SME Support Scheme from Sky Media.

The advert, which went live on July 2, was featured across a number of TV channels, including Sky Sports, MTV and Channel 5.

Sky’s SME Support Scheme has been launched to support British businesses getting back on track during the coronavirus pandemic, with £2.5 million invested.

Refurbished focus

The iOutlet specialises in refurbished handsets, with a particular focus on iPhones.

The company’s advert focuses on its refurbished sales and trade-in service, while also looking to boost brand awareness.

The iOutlet director Liam James said: “We felt that TV was the natural progression for the business to not only increase sales, but also increase brand awareness and bring it in line with other national brands.”

The advertising campaign focused on iOS users aged 35 to 54, and was screened to London and Devon postcodes.

James said the advert has been successful for specialists in refurbished devices, with sales up 54 per cent between March and July.

“Despite the coronavirus, we’ve just had one of our biggest weeks so far in our history outside of Christmas,” he said.

“The sweet spot for us has been the iPhone 8; it’s been very popular for us. Because Apple has confirmed that iOS 14 will support the iPhone 6s, that will give this model some extra shelf life right through until next year.”

Apple’s new iPhone SE could be a potential threat to the second-life market according to CCS Insight chief of research Ben Wood.

“The new iPhone SE will be met with dismay by companies that refurbish and sell second-hand iPhones as it will dent the second- hand price for all previous iPhones”, said the analyst.

Wood says the discontinued the iPhone 8 could prove a challenge for resellers to shift.

“What price delta do you need between an iPhone 8 and iPhone SE to make a used 8 more attractive than a new SE with updated specs. However, Apple will also not want the second-hand market to become too big as it needs to keep selling new devices.“ added Wood.

But Nick Muir, MD of the UK arm of French iPhone refurbishing company Remade, is an optimist.

“There seems to be an underlying commentary that somehow this is a dark day for second life sellers. I disagree with that. Certainly
I wouldn’t be happy if I had a huge amount of second-hand or refurbished iPhone 8 stock.

“That is not is a good position to be in right now. That said, the market for second-hand iPhones is used to seismic shifts at the launch of a new product. Every time it resettles and moves on.

“I don’t expect the SE will threaten second hand resellers. Today’s new iPhone is tomorrow’s second hand product”.

Matt Green, director of the iOutlet director thinks the new iPhone SE could be more of a problem for distributors rather than resellers of refurbished equipment.

“I wouldn’t say it’s a worry for resellers, as ultimately the product always ends up with the public and the customers.

“It’s only a worry if your business has a commitment to hold a certain level of stock under contract where prices are agreed before this came to fruition. The SE will likely impact distributors where things are done on a contractual basis”.

Mazuma managing director Craig Smith says it is a “good thing” that Apple has launched a more affordable device.

“Some people may decide to buy a brand-new iPhone SE rather a second-life model that has upgraded specs.

“But I don’t believe that it will have a massive impact on used sales. There will always be people who would rather have a higher quality phone, albeit as a second-life one.

“This will push us to deliver the best in second life devices. We have to be aware of what’s going on, but there’s not much we can do about it.

“We could see this product come back to us in 12 or 24 months time. People who don’t buy Apple may buy this and potentially become Mazuma customers in the future”.

Apple has traditionally been cautious about device repairs by independent menders.

The Cupertino-based giant has always preferred products needing a fix to be repaired in-house to help ensure the highest level of care – whether for an iPhone, iPad or iMac.

With Apple seeing a recent fall in smartphone sales, from 216 million in 2017 to 209 million in 2018, and being leapfrogged by Huawei, it now sits third for global shipments according to IDC.

So it has made sense for the company to shift attention to developing the repair side of the business via the likes of AppleCare, which customers can purchase on top of devices they buy.

This no doubt also provides Apple with an additional revenue stream as the smartphone business declines slightly.

For independent repairers, acquiring good- quality replacement parts for Apple products has proven difficult because the company has made it hard to get hold of them.

But on August 29, Apple confirmed that it will begin selling parts, tools and repair guides to independent menders so they can fix damaged iPhones, providing those shops have an Apple-certified technician who has received training from the company.

The move comes after the company was pressurised in a number of US states to be more open with its parts business through a ‘right-to-repair’ bill that would see Apple supplying these parts to independent firms.

The move could also aid the market for recycled phones by prolonging the life of devices.

While this is set to initially launch in the US, the plan is to later extend the strategy to other markets – which industry observers believe could include the UK. So what does the industry make of the move?

Why do you think Apple has chosen to sell parts to independent repair firms?

Mobio Distribution founder and director Josh Harrison: I think there were a few motivations for Apple to make this change. For one, it was probably a response to the right-to-repair movement that has been gaining traction in the US for a while now. Apple has been under a lot of pressure from independent repairers to relax its policies on non-Apple repairs. By allowing these firms into official supply channels, the company is acknowledging that you don’t have to have an Apple badge to be a trustworthy repairer.

I suspect that another contributing factor is lacklustre recent handset sales. A reduction in sales through Apple’s main channel is probably causing the company to look elsewhere for revenue. By allowing third parties to purchase parts from Apple directly, it will be earning from repairs that would usually have been completed using aftermarket parts.

NSYS Group COO Vadim Tim: In the past few years, the pre-owned mobile device market has been developing rapidly all over the world. And the forecasts are positive, with emerging markets actively developing the secondary market. The service level of independent repair shops is also increasing dynamically. In the UK in particular, there is a huge number of repair shops, from large retailers to small kiosks.

Apple understands that by not working with independent repair shops, it is losing a huge segment of aftermarket customers who want to get an iPhone at a more affordable price. By supplying official parts, the company is able to return revenue from this segment. Moreover, it’s a matter of reputation. Apple devices repaired with unofficial parts can damage the reputation of the company, which has already begun to lose ground compared to its direct competitors Samsung and Huawei.

IDC research manager Marta Pinto: Apple is really good at managing its installed customer base – shown by its repricing of older iPhone formats such as the 5S, SE and 6S. These users need to be served with a reliable aftersales service. Apple’s repair strategy should also help change brand perception, as the customer now knows that it can trust Apple to fix the devices rather than viewing them as rapidly disposable items.

In addition, customers with environmental concerns will often prefer their device to be fixed rather than having to dispose of it. Access to an official aftersales service is also important for those who buy devices second-hand, as they might not be direct Apple customers, but are still on the radar and Apple will want to provide them with the same level of customer service.

The iOutlet director Matt Green: I thought it was about time. We’ve seen similar things with car manufacturers in the past, and it’s good that the option is there for the Apple parts to be available. From my understanding of what I’ve read, it seems to me that Apple may have chosen to outsource this to help handle the volume of repairs, but will want to keep the quality so supplying its parts will help. The move makes good business sense for Apple.

iSmash founder Julian Shovlin: I think the pressure has been put on them by various states in the US – so maybe Apple is trying to get ahead of the game and do things on its own terms. It does seem like this has been building for some time, and is good news for the industry.

Do you expect Apple to make the same move in the UK?

Mobicode CEO Peter Kirby: I think in the EU, Apple will have a similar policy, but maybe won’t introduce it in the UK if Brexit goes ahead. The UK is quite a small market despite being a big Apple market. I expect it to come to the UK once right-to- repair becomes UK legislation.

Pinto: That is part of the brand value, while the customer expectation is to have the same product and service quality as in other countries. Some of Apple’s services are rolled out in different geographies to accommodate market segmentation, but I would argue that for a service that brings value to all customers like official repair centres, this should be available everywhere Apple devices are distributed with the same level of service.

Tim: Absolutely. This year, the iPhone is one of the UK’s most popular phones. The market for used devices in the country is also one of the largest in the world, while the customer base in independent repair shops is huge.

Green: I hope so; there are a lot of similarities between the UK and US markets, and the US always tends to get pilot schemes first. It really depends on how successful the move is in the US, but the right-to-repair campaign over there suggests it can be.

Do you welcome Apple’s initiative on repairs?

Tim: Of course. First of all, if this programme came to the UK, it would help support the business of our direct clients. It will be free for shops to join and will offer a free training course that allows companies to get an Apple-certified technician. These factors, combined with working with official parts, will improve the quality of the repaired product and increase customer confidence and loyalty.

Ultimo MD Joshua Hannan: I think this is a positive change that should allow wider access to original Apple parts, while also giving the consumer more choice on where to have their handset repaired.

Pinto: Yes as customers hold onto devices for longer, being able to prolong product life is key. That way, Apple can continue to engage with its customers and diminish the risk of losing them to the competition – which has pretty affordable devices with very good specs. It is an additional service that will help the brand keep its installed base satisfied and hold on to the other services that Apple rolls out.

Kirby: I welcome this with caution. It is a good thing but I am cautious with Apple because I know their main objective is selling new phones. It will be a positive thing if Apple does embrace this properly and treats it like a parts business. That would no doubt help our industry.

Shovlin: Yes, I do. Hopefully this will give customers more choice and options to go and get high-quality repairs. I think Apple has been over-controlling the market for too long now, so it’s good news for companies and customers.

Green: It’s really good news for the industry. However, it really depends on the pricing. An example would be the motor industry, with the way it prices car parts differently between third parties and original equipment manufacturers. Ultimately, it gives the consumers another option and a bit more flexibility.

Harrison: Having the option to buy official Apple parts can only be a good thing for repairers and the public too. It’s positive for the industry.

What difference will the move make to your business if it comes to the UK?

Shovlin: I don’t actually think it would make much of a difference to our business. The biggest issue with this scheme will be the cost of parts, and I expect Apple to price itself out of the market. For us, I expect we would continue to source from our own supply chain, however we will keep an eye on how this develops in the early stages.

Kirby: It helps the recycling industry to become more accepted and recognised. If Apple is supporting and endorsing third- party repairs, people’s views of previously owned phones will change to be more positive and there will be more demand for these devices.

Hannan: It should allow us the opportunity to offer the consumer both original and second hand parts, offering us a great selling point. I’d expect that many more consumers who have previously only had their phone repaired directly by Apple would be willing to use independent repairers, which is a huge positive.

Harrison: At Mobio Distribution, we supply aftermarket parts to repair centres around the UK. If the repair programme is successful in the US and is introduced in the UK, I suspect that a small portion of repairers would want to buy from Apple direct, but overall there would not be a huge change to our business.

Tim: We can expect the number of Apple devices being repaired in independent stores to increase. For us at NSYS, it would directly increase the number of devices that need quality control with our set of tools.

Green: It’s hard to say right now as it all depends on the costs of the parts and how successful the initial uptake is. As long as it’s reasonably priced, then it could be positive and offer greater choice.

Do you expect Apple’s biggest rival Samsung to react by making any changes to its own repair strategy and diversifying to use more third parties?

Harrison: Samsung-approved repair centres have access to genuine replacement parts and their relationship tends to be a little less strict than that between Apple and its authorised resellers. I don’t think we will see any changes from Samsung in how it approaches repairs.

Shovlin: I think Samsung is quite controlling, like Apple. However, it has more authorised repair centres and distributors, so has been more open when it has come to repairing handsets. It’s been genuinely easier to source Samsung parts than Apple parts to date, so I don’t necessarily think Samsung will follow its strategy given that it has a better- developed repair service. I would expect Samsung to continue focusing on its own repair infrastructure.

Pinto: Samsung has a different portfolio to that of Apple. With wider diversification of elements such as components and screen sizes, and a faster rollout of new devices, supplying parts is more challenging for Samsung. Also, the lifecycle and second-hand value of a Samsung device differs from that of an Apple one. Before tapping into that business, Samsung will need to evaluate the benefits: for the S and Note series, it is an easy sell, but for lower-price devices, the balance between the cost of fixing the phone and buying a new one is hard to weigh up.

Will you be training your technicians to deal with Apple-specific repairs?

Shovlin: We’ll see how this develops and what the cost of the parts will be. We’ll need to assess it and see if this is something worth pursuing.

Hannan: Yes, absolutely: the opportunity would be too good to pass up for Ultimo.

Green: If it’s not extortionate then that’s definitely of interest to us. As long as it’s something that can drive business for us, then it’s something we’d consider, but we’ll wait and see initially.

Kirby: Our technicians have a broad experience of all manufacturers. However, in the past training from other big manufacturers for my team has been very welcome and it’s important that repairs are at a professional standard for this industry to get broad acceptance.

It is no secret that the smartphone market has stalled in recent times, with even Chinese handset sales declining 14 per cent last year.

But there is one market that is offsetting the trend – that of refurbished smartphones.

This was the fastest-growing segment in 2018, rising seven per cent from the previous year, according to statistics by Counterpoint Research

In fact, it’s such a lucrative market that it is worth an estimated £22.95 billion globally in retail sales, with 150 million refurbished handsets sold last year worldwide.

It’s a market in which operators, distributors and manufacturers such as Apple are involved, with more anticipated to follow suit.

The UK was the largest individual market in 2018, with between 2.2 and 2.4 million units sold, according to Counterpoint’s figures.

This figure meant that refurbished smartphones are now claiming close to 10 per cent of the UK market.

But how has this segment grown so much?

DRIVERS

A number of factors have led to this growth, with cost being arguably the most common reason cited.

With flagship handsets pushing the £1,000 mark and beyond, refurbished devices have become an attractive proposition price-wise, says iSmash founder and MD Julian Shovlin.

“One of the key advantages of refurbished handsets is that they tend to be much cheaper, and this has been a key reason for the increase in consideration,” he says.

iOutlet director Matt Green agrees and says slower innovation from some of the bigger players has contributed too.

“The cost of the latest handsets has risen considerably, especially iPhones,” he says. “People haven’t been as impressed with the latest flagships and aren’t seeing the value in spending the higher prices for them.”

Phoenix Cellular director and co- founder Paul Walters agrees there has been a lack of groundbreaking innovation from the big names. He estimates, meanwhile, that a good-quality used handset is around 35 to 40 per cent cheaper than a new handset.

Counterpoint Research author Peter Richardson believes, though, that the prices of refurbished handsets aren’t actually too cheap themselves – yet that this can also benefit the industry.

“In a sense, refurbished phones are reassuring given the expensive prices they command,” he says. “They’re not that much cheaper than a new product. It gives businesses and consumers comfort that they’re getting a professionally managed, good product.”

POTENTIAL

As with any growing segment, there is room for further opportunities in the refurbished market.

Richardson says, for example, that there is significant potential for more operators and retailers to cash in. “They can look at offering consumers money to buy their phones as a way of potentially offsetting the cost of a new handset,” he says.

“This benefits the customer, as they can get it cheaper, but businesses too. From a business perspective, they can sell the device twice and generate more value.”

Richardson also believes the market gives people a chance to make better environmental choices too.

“It can be seen as a positive environmental choice if you recyle a phone or buy refurbished handsets. From a social and environmental perspective this could have some positive implications,” he says.

The growth of SIM-only plans has also paved the way for opportunities in this market, adds Walters.

“There’s so much room for growth and it feels like the average consumer is waking up to the fact that they can split their contracts and be more flexible with airtime contracts,” he says. “The overall package of a used phone works out more cost-effective for them.”

WARRANTIES

One important aspect in the refurbished market is getting the warranty term right.

Green at iOutlet – which specialises in selling refurbished iPhones and other Apple products, as well as offering device repairs – says that although devices from brands such as Apple often sell themselves, having a sufficient warranty is crucial for customers.

“Warranty is a massive thing and is important to anybody that buys a second-hand device,” says Green.

“Ultimately, we’re selling Apple products and they’re not difficult to sell, given the brand often sells itself. However, as a refurbished seller it’s important to be competitive, especially around warranties.”

Phoenix Cellular, which distributes in the B2B channel, offers varied waranties of between 14 to 30 days and up to 12 months with its premium-packaged GR8 Mobile service.

“We offer these different services as they can be tailor-made to suit the needs of the businesses that we deal with,” says Phoenix co- founder Andrew Dulla.

Meanwhile, Shovlin believes people are persuaded to buy refurbished based on how the proposition is sold to them.

“It comes down to the credibility of the company that is selling the handsets and it is all down to how the proposition is packaged. Customers will be interested in choosing handsets that come attached with good warranties.”

ROOM FOR OTHERS

With the UK such an Apple-heavy market and given the revenues that iPhones command, there appears a huge opportunity for more manufacturers and players to join this space.

Richardson expects more of the bigger players to get involved as they identify how much money can be made in this market.

“I believe more will join,” he says. “One of the reasons why Apple is so successful is because of how well it does in the second-hand market.”

Richardson adds: “For players such as Huawei there are opportunities, especially through the P series. Huawei should be thinking about how it can exploit its potential, and the existence of a refurbishing programme will help.”

Apple is one manufacturer that sells a number of refurbished devices on its website – and even offers one-year warranties for its products.

For Phoenix, which sells pre-owned iPhones, Dulla says the market benefits Apple and those selling its phones.

“I feel manufacturers are embracing this, because ultimately every used phone we sell, whether a 5S or 6S, Apple is either gaining or retaining a customer,” he says. “Customers will use the App Store and added services that Apple sells.

“Companies such as Apple can make just as much from its App Store and iTunes services as from the hardware itself.”

HURDLES

As for any sector, there are challenges to overcome in the refurbished handset segment.

Apart from the perception of how reliable these devices are, one challenge relates to the grading standard and testing of pre-owned handsets before they are distributed.

Dulla says the fact that there is no industry-wide grading standard is a hurdle.

“We believe in our grading, but it’s difficult to know how other businesses grade their devices and this can create a false price in the market,” he says.

“There is no universal grading and this presents a challenge.”

Shovlin agrees: “Because it’s not a new handset, there can be variations in the quality of the device and the handset in terms of how it is graded. “Some sellers will have different grading systems; it ultimately comes down to the credibility of the company.”

There are other challenges too, with Green saying that performance in the segment can be seasonal.

In the summer, for instance, he says, “there won’t be a great deal of trade-ins as people will be waiting for the Apple launch. It’s very dictated by release dates and this is the year- on-year cycle within the industry.”

YOUNG MARKET

Nevertheless, Richardson says the refurbished market is still young and has plenty of potential.

“It’s a bright future and we’re still at the very early stages of this. It’s also a positive for the industry and consumers, as it provides more choices for people,” he says.

Some feel the market will be dictated by what the big names do in the future.

Green says: “It all depends on what the top of the food chain is trying to do, such as Apple and Samsung with its new models.”

For Green, the prices that these bigger players are selling smartphones for will likely be the main influence on the refurbished market.

“If Apple keeps bringing out £1,000 phones, I don’t expect the iPhone 8 and X’s to sell through as quickly as the 7 and 6’s have. In fact, we might even see iPhone X devices having a third life as they started out at such a high price,” says Green.

He adds that “it certainly feels as if Apple and Samsung are hitting the ceiling with how much it can sell phones for” and expects the refurbished segment to continue growing.

Walters also expects further growth, with opportunities for operators to use this to their advantage.

“I’ve been in the industry since 2013 and I’ve always thought that operators should be using old handsets to build a deal when customers want to either upgrade or get a new connection,” he says.

“It’s a market that is not going away and is only going to get bigger. I expect this industry to outstrip sales of new handsets in terms of growth.”

Apple resellers say they are not anticipating any loss of business following an agreement between Apple and Amazon to sell Apple kit on Amazon.

Amazon struck the deal with the manufacturer last week that means only Apple-authorised sellers will be able to sell Apple and Beats products through the Amazon website from the beginning of next year.

Following the announcement, third-party sellers that offer iPhones and other Apple products on Amazon could face an uncertain future unless they apply directly to the Apple to become official resellers.

From January 4, companies selling these products on Amazon in the UK, Germany, France, Italy and Spain will have them taken down unless they become authorised.

Phoenix Cellular director and co-founder Paul Walters, who distribute refurbished Apple phones, said he does not expect the decision to impact the company’s business, adding:
“I don’t believe it will affect us, as I don’t see our customers selling much on Amazon.

“They tend to sell on more European platforms and through European retailers. Amazon is not a big one for our customers today.”

The iOutlet is one reseller that sells Apple products through Amazon’s website, but is authorised to continue doing so.

The iOutlet founder Liam James said: “We’re currently on the Apple approved programme, so it won’t impact us and applies more to smaller businesses. However, I can see a lot of these suppliers going towards other platforms such as eBay now instead.”

Letter to Resellers

Amazon has sent a letter to its resellers that offer or previously offered Apple products on its website and informed them that they need to apply directly to Apple for authorisation.

The letter also says that resellers with any remaining stock in Amazon fulfilment centres as of January 5 will have to create a removal order.

In a statement, an Amazon spokesperson said: “Amazon is constantly working to enhance the customer experience, and one of the ways we do this is by increasing the selection of the products we know customers want. We look forward to expanding our assortment of Apple and Beats products globally.”

Amazon has confirmed that companies that list Apple products and are part of the Amazon Renewed (Certified Refurbished) programme will not be affected by the changes.