Sales of new smartphones fell by 11% in the first quarter of the year compared to the final three months of 2021. This is what the Canalys agency report shows. Although considered natural by analysts, factors such as the war in Ukraine, the lockdowns in China and the general increase in the price of new devices contributed to the reduction in business volume. Another factor that impacted was the consequent lack of components to supply the technology industry.
In this context, the expectation is that the market for used and refurbished smartphones will continue to expand across the planet. According to another survey, carried out by Counterpoint, a global industry analysis company based in Asia, in 2021 the second-hand smartphone market grew by 15% compared to 2020, while the sale of new devices grew by only 7%. . According to the study, Latin America stood out with 29% growth in used car sales and India with 25%.
Senhor Smart, a Brazilian network of smartphone and tablet technical assistance franchises, also identified an increase in demand for repairs and maintenance. In 2020, with the start of the home office system due to the pandemic, there was a 151% increase in battery repairs, even though the products were more than 200% more expensive than in 2019 due to the stoppage in production and the shortage of some supplies due to the health crisis.
In the last two years, Senhor Smart franchises performed more than 37 thousand screen replacement services. In 2022 alone, there were 13,000 battery replacements and more than 34,000 camera repairs. According to computer engineer Rodrigo Correia, founder of the company, the smartphone and mobile device market will continue to expand. “The devices add countless functionalities to the user”, highlights the engineer.
As an example of the day-to-day facilities with the device, for work, are the online meetings; in locomotion, the use of transport and delivery applications; in leisure, access to social networks, music, video and podcast platforms; and in food, delivery orders; in addition, the services area is at hand, on the cell phone, such as banking applications. “During the pandemic, the demand for technical assistance in Senhor Smart stores grew by 50%”, explains Correia.
Sales of used smartphones will continue to expand
In the opinion of Glen Cardoza, an analyst at Counterpoint, the market for used and refurbished smartphones should continue to expand on the planet. This rise is driven by the prices of new devices that are more expensive and also by the growing awareness of consumers about the disposal of garbage and technological waste in the environment. “We are seeing significant growth among refurbished market players in developing regions such as China, India, Latin America, Southeast Asia and Africa.”
Samsung itself, the manufacturer with the largest share of the smartphone market worldwide, recently announced a program developed in partnership with iFixit that allows consumers to repair their gadgets at home. The novelty is part of the initiative to preserve the environment developed by the South Korean. According to Business Korea, the self-repair program should be expanded andwill start supplying recycled partsto lower Galaxy smartphone repair costs.
The company’s idea is to recycle some components and provide them to consumers in the self-repair program at a more affordable price. So, instead of buying a completely new display, the consumer can choose to pay cheaper on a recycled one that has Samsung certification.
In addition to the semiconductor crisis, which has been affecting the price of smartphones and other electronic devices since the beginning of 2020, the war in Ukraine is expected to contribute to the rise in the cost of cell phones. As with oil, nickel – a fundamental input in the manufacture of electronics – became more expensive after the start of the conflict. A ton of metal, which until then was sold for US$ 25,000, reached US$ 100,000, the highest price in history – the current price is around US$ 37,000.
Russia is the country that exports the most nickel. Moscow-based MMC Norilsk Nickel is the largest producer of metal of sufficient quality to be used in batteries, accounting for about 15% to 20% of world production. Given this, the expectation is that the price of cell phones and other electronic devices will register a considerable increase throughout the year.
In the pandemic, battery repairs grew 151%
Senhor Smart, a Brazilian technical assistance network for smartphones and tablets, plans to double its revenue in 2022 compared to last year, reaching R$ 7 million – in 2021, the amount was R$ 3.5 million. Founded in 2014, in Jundiaí, in the interior of São Paulo, with the proposal to offer customers a personalized service with respect and transparency, the brand is present in practically all Brazilian states. With more than 100 stores in operation, it is projected to reach 300 units sold in 2022, with 160 in operation by the end of the year.
According to computer engineer Rodrigo Correia, founder of Senhor Smart, the franchise business model does not require the franchisee to hire a large amount of specialized labor. And, in addition, there is the franchisor’s support in all business deployments. The investment for opening a unit is R$ 49 thousand, and the projected average revenue is R$ 150 thousand and average monthly profit of 40%.
“The franchisor provides all the training and support necessary for the qualification of technicians”, explains Correia. “With a trained person, the unit can reach a turnover of up to R$ 60 thousand reais in maintenance, with the completion of 300 repairs per month, in addition to the added value of accessories that adds up to the store’s final profit.” In the last two years, Senhor Smart franchises performed more than 37 thousand screen replacement services, almost 13 thousand battery replacements in 2022 alone and more than 34 thousand camera repairs.
In 2020, with the start of the home office system due to the pandemic, there was a 151% increase in battery repairs, even though the products were more than 200% more expensive than in 2019 due to the stoppage in production and the shortage of some supplies due to the health crisis. “The used market has developed a lot”, comments the businessman. “As a result, the services sector has also developed. Today, the smartphone is considered an asset, which the person keeps to be used as cash later on.”
Senhor Smart is a company of the 300 Franchising group. For the next five years, it plans to be present in other Latin American countries and in some European markets, such as Portugal, Spain, Ireland and Italy. In Brazil, the priority regions for expansion are the North and Northeast of the country. In 2019 the company had 33 units, in 2020 it entered the process of accelerating 300 Franchising with 45 stores and currently has 117 in operation and 110 sold in the process of opening.
Another objective is to start trade-in operations, a modality in which the customer enters with his used equipment as part of payment for new equipment. In addition, Rodrigo Correia plans to carry out projects to reduce the disposal of electronic material, including the reuse of batteries and the repair of smartphones for the needy community of Jundiaí, the franchisor’s headquarters.
Personalization renews the look of used appliances
Another brand that has been surfing the expansion of the smartphone market is Itcase, a network specialized in cell phone accessories – cases, headphones, films and chargers. Founded in Chapecó, in the west of Santa Catarina, the company is yet another brand accelerated by 300 Franchising.
Personalization, by the way, is one of the company’s great insights. Much more than importing articles and reselling them on Brazilian soil, the network produces new designs and customizes the goods on national territory. Every three months, the company creates collections of prints, prints new cases, which become totally new, different and exclusive products, helping to renew the look of devices that are not necessarily new.
In the coming years, the brand will invest in the development of a product catalog entirely “by ItCase”. With 40 units sold and 15 in operation, the brand plans to close the year with 120 units expanded and in operation. To assemble a unit, the investment starts at R$ 130 thousand, with estimated monthly revenue of up to R$ 50 thousand and an estimated profit of up to 40% per month.
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