Buying Used Phones Instead of Expensive New Ones... Will Market Trust Increase?

Numerous Peer-to-Peer Transactions... Legislative Push to Revitalize Market
High Prices for Used iPhones... Popularity of 'Refurbished Phones'

The government has launched efforts to revitalize the used phone market to reduce the burden of device purchase prices. As a way to increase the reliability of a market that relied on peer-to-peer transactions, legislative initiatives are being pursued.

The used phone revitalization measures included in the "Telecommunications Market Competition Promotion Plan" announced by the Ministry of Science and ICT on the 6th are now moving toward legislation.

[Image source=Pixabay]

Legislation for Used Phone Revitalization Measures Begins

Recently, the Ministry of Science and ICT and the ruling party have concluded discussions on preparing legislation to revitalize the used phone market. Currently, the bill is in the final stages of refinement before being proposed, and Representative Heo Eun-ah of the People Power Party is expected to be the main sponsor.

The Ministry of Science and ICT announced that through the Telecommunications Market Competition Promotion Plan, it will establish a system to publicly announce used phone businesses that meet certain conditions and introduce a transaction verification service between sellers and buyers to increase market trust. To this end, it will foster businesses that meet requirements such as price information disclosure, issuance of performance certificates, provision of personal information deletion programs, and exchange/refund within a certain period. The bill is expected to include content related to revitalizing the used phone market.

As device prices have recently soared, more users are purchasing used devices instead of new ones. However, the used phone market is largely a blind spot where management and supervision are impossible because most transactions are peer-to-peer through used trading platforms. It is difficult to respond even if problems arise after purchase. There are many cases of damage, such as devices believed to be properly terminated later confirmed as reported lost devices, or receiving the wrong item after delivery. There are also issues of personal information leakage. Even when going through dealers, products repaired with counterfeit Chinese parts or products assembled with parts from various sources, even if genuine, are sold.

According to the National Statistical Portal of Statistics Korea, household communication expenses in the first quarter of this year were 130,285 KRW, up 7.1% from last year. Among these, communication equipment expenses, which include device purchase costs, were 30,412 KRW, increasing 28.9% during the same period. If the used phone market is revitalized, such burdens will be reduced.

Samsung Dominates Domestic Used Phone Distribution... iPhone Prices Are Higher

According to a survey by Gallup Korea on smartphone brand usage in the country, as of July, Samsung Galaxy accounts for 69% and Apple iPhone for 23%. Naturally, more Galaxy devices than iPhones are traded domestically in the used market. Medialog, which operates the used phone purchase platform "Cello," stated, "The Galaxy S21 is the most purchased, followed by the Note 20 and Z Flip3."

Used prices are generally higher for iPhones, which have lower subsidies at purchase and are preferred by the 10-20 age group. According to the Setizen used smartphone trading site prices as of the 20th, the iPhone 14 Pro Max (512GB), released in October last year, is priced at 1.85 million KRW, which is 84.1% of the retail price. The Galaxy S23 Ultra (512GB), released in February this year, is priced at 1.265 million KRW, which is 73.5% of the retail price.

There are also older smartphones that are more expensive than the latest models. According to foreign media such as CNN, an unopened first-generation iPhone released by Apple in 2007 was recently auctioned for $190,000 (about 241.59 million KRW). Among Samsung's masterpieces, the S20 series has a higher used price than the S21 released the following year. Based on unlocked models, the S20 (128GB) is 366,000 KRW, the S20 Plus (256GB) is 439,000 KRW, while the S21 (256GB) is 350,000 KRW, and the S21 Plus (256GB) is 365,000 KRW.

Refurbished smartphones (refurb phones), which are returned or initially defective products repaired and resold at lower prices, are also popular. According to Counterpoint Research's "Global Refurbished Smartphone Tracker," refurbished smartphone sales increased by 5% last year compared to the previous year. During the same period, new smartphone sales decreased by 12%. In Korea, mobile carriers inspect and sell products canceled or returned within 14 days after activation, as well as display models. Although these products are like new, they often sell out quickly at prices up to 40% cheaper.

This content was produced with the assistance of AI translation services.