With smartphone manufacturers launch new smartphones almost every week, with improved specs and features, consumers are upgrading to better phones faster than they ever have before. Many smartphone owners upgrade to new phones within six to twelve months. Moreover, any newly released phone will find its way to the second-hand phone market within 4 to 6 months, according to a report entitled "The second Hand Mobile Market India by Mobigarage an online guaranteed-sale platform.

Unsurprisingly, the market for used smartphones is growing, and getting more sophisticated. The phones are now being tested on a variety of parameters, and are repaired and granted the tag of refurbished. As per the Mobigarage report, the of the refurbished smartphone market was about 11% of smartphones market in India in the year 2018. The overall percentage of growth in used phones, which includes used and refurbished phones in India is about 25%, much higher than the average global rate of 18-20%, according to the report.

Larger e-commerce firms such as Amazon under the name Amazon Renewed, Flipkart under 2GUD Mobigarage, among other companies have also entered this market. "The second-hand market is being largely captured by refurbished phones, which have been growing at more than 200% year-on-year and are the largest product category in the refurbished space," stated an official from Amazon in an email reply.

However, how do used phones compare to second-hand handsets and what do they cost on a cost basis? First, let's understand the differences between second-hand and refurbished phones.

Typically, a used cell phone goes through a number of tests before it can be returned on the marketplace. For instance, the dealer will examine whether the camera, battery, or buttons function, as well as the quality of the audio and screen response and network WiFi connectivity and so on. Although these are merely basic tests the phones selected to be refurbished go one step higher. In addition, it's typically the latest phones that are selected to be repaired.

"Once cleared by experts, the phone is taken to the Refurbished iphone facility where it undergoes more rigorous checks and parts that need to be repaired get due attention," said Nakul Kumar the chief operating officer and co-founder of Mobigarage. The tag guarantees that a top-quality repaired phone is just as good as new but at a cheaper price.

"The phones that are sold on the second-hand market are given to the original equipment manufacturer or third-party refurbished players, and when needed, they are repaired by them in their own facility. They are rigorously tested to ensure that they're working to their fullest potential, and then graded according to their performance," said Varun Mishra, research analyst, mobile device and ecosystem, Counterpoint Market Research, an industry research company.