As prices for new smartphones surpass 2 million won, an increasing number of consumers in South Korea are turning to second-hand devices, driving up prices in the used phone market.
According to UPM, a local big data company specializing in used phones, the average purchase price of used smartphones has more than doubled over the past five years, rising from around 120,000 won to 260,000 won. Since companies that buy used phones add a markup before reselling them, final prices for consumers have also increased.
Industry experts attribute the shift to higher smartphone prices with few major innovations. Many new features, such as artificial intelligence (AI), can now be added to older models through software updates, reducing the need for consumers to upgrade.
“More people now see used phones as a viable option,” said an industry insider. “The second-hand phone market is expected to grow further.”
In the first half of this year, the average price companies paid for used phones was 257,000 won, more than double the 121,000 won paid in 2019, UPM reported. The company, which provides inventory management systems to used phone vendors, said these firms handle between 5 million and 6 million devices annually.
The rise in used phone prices is partly driven by “phoneflation”—a term blending smartphone and inflation. As the cost of new phones increases, more consumers are opting for second-hand devices, pushing up prices in the used market. For example, the highest-end iPhone 11, released in 2019, was priced at 1.99 million won, while the iPhone 15, released last year, costs as much as 2.5 million won. Samsung also launched its Galaxy Z Fold series in 2019, with models priced over 2 million won.
Another factor contributing to rising used phone prices is consumers selling their old devices more quickly. In the past, people often kept old phones for four or five years before selling them. Now, they are more likely to sell their devices soon after purchasing new ones to help offset the higher price tags.
“With smartphones becoming more expensive, people are selling their old phones sooner, which has raised the buyback price,” a used phone industry insider said.
The improved quality and durability of used phones have also fueled demand. Manufacturers continue to offer regular software updates, allowing older devices to run many of the same features as newer models. Samsung’s AI features introduced with the Galaxy S24 earlier this year, for example, have been made available on older models like the Galaxy S22. The “Circle to Search” function, which allows real-time search by circling an item on the screen, is now available on the Galaxy S21.
A significant portion of used phones bought in Korea are Samsung models. The share of Samsung phones in the used market has risen from 55% in 2019 to 70% in the first half of this year. Given Samsung’s 70% market share in the domestic smartphone market, it’s no surprise that a large number of its devices enter the second-hand market.
Samsung’s aggressive trade-in program, which offers rebates when customers return old phones upon purchasing new ones, has also contributed to the influx of used Samsung devices, UPM CEO Yoo Sang-hyun said.
However, Apple products command higher prices in the used market. In the first half of this year, the average buyback price for an Apple device was 499,000 won, compared to 178,000 won for a Samsung device. The difference is attributed to Apple’s focus on premium smartphones, while Samsung offers a wider range of mid- to low-priced models.
“iPhones have strong customer loyalty and high demand both domestically and internationally, keeping used iPhone prices high,” said an industry source.
The used smartphone market is expected to continue growing, attracting interest from major corporations and telecommunications companies. This year, Naver launched a used phone trading service through its KREAM platform, and both KT and LG Uplus are operating their own used phone platforms via subsidiaries.
A survey by the Korea Information Society Development Institute in the second half of last year found that 34.5% of respondents had sold an old phone, while 30% had purchased a used device.
