Items of interest that are on the periphery or weren’t quite meaty enough to write a single post about (yet) include:
It appears that my extremely short-lived sense of iPhone self-repair excitement1, resulting in my realisation that doing anything more than plugging it in at night puts me way out of my depth, may not be available to the wider masses after all. Frustratingly, the EU appear to be considering some amount of back-tracking so that whilst we might be able to buy the part, we won’t be able to fit it. Mind you I’m not surprised with all those death threats in the iPhone 12 manual. As you might expect, the folks at the Right to Repair Coalition are pretty hacked off2 and have made their feelings known to the EU3. Good for them.
Meanwhile, according to multiple sources45 including their own:
Jony Ive and Sam Altman are gunning for our precious mobile devices with their yet to be announced AI hardware from supergroup IO. Well, it better be bloody repairable, that’s all I can say.
Foxway's Q1 results demonstrated the operational resilience that's been building through their transformation programme, despite topline growth remaining constrained by market conditions. Whilst quarterly revenues declined 5.3% year-on-year to SEK 1.7bn (EUR 147.8m), underlying profitability excluding currency losses grew 25%, with management successfully maintaining margins despite the sector headwinds. Momentum is looking good though with CWS already securing more contract value in Q1 than in the entirety of 2024, Samsung's Galaxy S25 launch driving strong sourcing in Recommerce Mobile, and automation investments beginning to show scale benefits. With leverage still elevated at 5.3x and acquisitions effectively on hold, management's focus on organic execution and operational efficiency appears to be paying dividends (not literally), although cash flow turned negative due to inventory investment prior to the Samsung S25 launch, which again highlighted the working capital intensity of growth in this sector6. Finally, interesting to read their automated warehouse facility in Estonia processed 1.5m devices in 2024 which is expected to triple within 5 years.
Long has been Hong Kong’s reign over the secondary device market, its infamously porous border with Shenzen driving trading across the globe. In recent years though, that reign has been challenged by Dubai’s strategic positioning between Europe, Africa and Asia and, as Apple’s global supply chains realign to the latest world order, there’s very likely more change on the way. Perhaps nothing more than coincidence, but Orient Telecom’s7 report of ten Hong Kong-based distributors being targeted by under-cover buyers and suddenly shut down on suspicion of selling counterfeit iPhones feels like it could be a precursor to broader enforcement that might accelerate changes to the established trade routes. With further confirmation of Apple accelerating its manufacturing shift to India this month8 and tariff uncertainties disrupting traditional flows9, secondary market hubs may need to adapt quickly or risk losing their strategic advantage to more compliant jurisdictions.
As the Q1 results begin to roll in there’s further evidence that shifting consumer habits in device buying10 might be taking its toll on the carriers. It’s difficult to accurately extract consumer device sales from “Non-Service” or “Equipment” revenues, but for the most part these revenues are down YoY across the board. DT Germany reported Q1 non-service revenues down by 20% YoY, Telefonica management noted overall handset sales were flat (down 0.4%) and specifically pointed out low-margin handset revenue (down 6.6% YoY) as a key factor at the VMO2 unit11. Vodafone reported “Other Revenues” in Germany down 17% marking yet a another low point in overall performance12. Additionally, Orange, 1&1, KPN, VodafoneZiggo all reported drops in non-service revenues compared to this time last year. Carriers still play the largest overall part in consumer distribution of devices but I think there is growing evidence of more than a trend13 14. Amongst other things, I think the extended lifecycles may be driving a structural change that’s worth a deeper look. I’ll try and get to it next week.
Falling device sales may have been one of the prompts pushing Vodafone to introduce a refreshed screen repair insurance15. Device insurance is almost always sold in two flavours: Damage Cover including accidental damage & mechanical breakdown or Full Cover adding loss & theft to the covered perils. Vodafone launched a third flavour for Screen Damage only back in February 2024. The product was updated this month, mostly for data protection jurisdiction purposes. For an iPhone 16, the screen damage only offer comes in at £3.50 per month with an excess (confirmed on purchase) between £25 and £125. Features and limitations include a 3-month minimum term, up to 3 claims in any 12 month period and cover for any additional accidental damage which occurred at the same time as the screen damage. That feels generous. I tried to compare the price against an iSmash walk-in and Likewize repair, but neither could offer me a replacement screen. With new device sales falling, interesting to note this cover includes refurbished phones. I expect other carriers and banks to follow.
As I continue to advocate for consolidation in the secondary market, big moves may be afoot up the chain as well. There’s been vocal advocacy from carrier CEOs for some time but Telefonica appear to be first out the gate with the “easier” acquisition of Liberty’s share in VMO216. Big news across the pond as well with Charter entering a definitive agreement to acquire Cox communications. The headline prices is $21.9bn as the combined entity 38m subs would surpass market leader Comcast. They’ll be targeting half a billion dollars in cost synergies within three years of the deal closing which is expected to be mid 202617.
Staying Stateside, ecoATM released their 2024 ESG report18 highlighting some interesting data. They collected 6.7m devices in 2024 up 6.4% from 2023. Cumulatively, Apple tops the brand chart with 2.8m devices collected followed by Samsung with 1.5m devices and Motorola making the top three with 626k devices. Texas, California and Georgia are the top three contributing states. Central to their collection strategy might be the $1 minimum for any device collected as part of their commitment to reducing e-waste. Whilst US trade-in rates are way beyond what we’ve come to expect in the EU, the statistics might provide useful “what-if” benchmarks for the likes of Pandas and Get-Re.
If you missed all the forward trade-in news from Samsung, Recommerce and Dipli, earlier this month, I published an in-depth view here. Additionally O2 were out and about promoting their Recycle for Business which to be frank, has some less than compelling numbers. The service, powered by Ingram has: “Since the scheme’s relaunch in October 2023, companies across the UK have traded in thousands of unwanted smartphones and tablets, earning nearly £330,000.”19 I know competition for devices is hot, and this probably supports that view, but surely O2 can do better than that? Hence the publicity I guess.
Not that there’s anything to see here, but Backmarket filed FY2024 UK accounts20, from which we can tell absolutely nothing as it relates to their performance. As a reminder and much to my continued professional consternation, the UK entity simply acts as a service provider to Jung SAS, the French parent (which doesn’t file publicly available accounts). Revenues for the provision of sales and marketing support functions increased to £2.3 from £2.0m in 2023. This may or may not be linked to performance. The loss before tax was recorded at £158k which helped to clawback some of the tax paid on the FY2023 profit. Japes.
John Lewis, the UK bastion of middle class quality shopping, filed their FY2025 accounts. I keep an eye on these because they are one of the few non-specialist retailers to separate technology sales in their revenue analysis. Whilst the category is broad, technology sales grew 3.5% to £1,361m. However, despite the increase, new warranty deferrals were down almost 12% from £17m in FY2024 to £15m in FY2025. This suggests either fewer technology sales with warranties, or lower average warranty values per sale, i.e. lower ticket prices overall.
Speaking of warranties, at the beginning of May, Canadian retailer and repairer, Mobile Klinik began offering a lifetime warranty on any certified pre-owned phone purchased and activated on a Telus or Koodo plan. Until reading this, the longest warranty I’d found was 3years offered by Rebuy21.
Right, once I start to get beyond about 15-18 footnotes, I know that’s probably enough for the month. As always, thank you to my new subscribers and a shout-out to all my existing subscribers who have made it this far. Hope you found this month’s edition useful and please like or comment as it really helps the stats.
Peace,
sb.
Very insightful and detailed roundup, thanks for sharing.
Interesting the different reporting or terminology for device sales (non-service, equipment, etx) of different telco opearotors. I face a similar issue analysing asian telco operator financials. Another indicator can try look at is the inventory holding trend. But many operators keep inventory off the books wirh their disty/fulfillment partner, so that also might not be so useful.