New Blancco Study Confirms Consumer Trust Is a Major Inhibitor to Second-Hand Mobile Market Success

Lucrative revenue source for operators, OEMs and third-party logistics providers could be diminished without clear assurances around responsible data management

AUSTIN and LONDON, February 13, 2019 – Results of an exclusive global consumer research study examining consumer sentiment and actions for trading in mobile devices was released today by Blancco Technology Group (LON: BLTG), the industry standard in data erasure and mobile device diagnostics. Blancco found that 58 percent of global consumers surveyed have yet to trade in an old device, though almost two-thirds (64%) globally reported they would be willing to do so if more stringent data management processes were in place.

This is good news for mobile operators, OEMs and third-party logistics providers (3PLs) who, according to Counterpoint Research, have seen revenues for the used device market grow faster than the market for new devices. According to IDC, the worldwide refurbished phone market is estimated to be worth $52.7 billion by 2022.

Blancco’s study, titled “The Critical Importance of Consumer Trust in the Second-Hand Mobile Market,” proves the need to maintain consumer trust if the secondary mobile device market is to meet current expectations. In fact, 66 percent of respondents globally revealed some concern that data on their old devices might be accessed or compromised after trade-in. This mistrust among global consumers could be attributed in part to recent high-profile incidents of data misuse, such as the Facebook and Cambridge Analytica scandal.

“The secondary mobile device market is a huge success story,” said Russ Ernst, EVP, Products & Technology, Blancco. “Each of its major stakeholders – operators, OEMS and 3PLs – have so much more value to extract from it as more global consumers choose to sell or buy used equipment if they trust in the process of used device collection and redistribution. Our study makes it clear, however, device collections will accelerate only if operators, OEMs and 3PLs remain fiercely committed to data management and device erasure best-practices.”

Additional global findings:

• 40 percent of global consumers experiencing a data breach would switch operator or OEM provider, while 54 percent of global consumers wouldn’t trust the brand and 49 percent wouldn’t use the company again
• Almost half (48 percent) of consumers would seek legal advice if they were to fall victim to a data breach after trading in an old device
• 59 percent of global respondents called for stronger regulation to ensure tighter data controls are implemented to prevent breaches of their personal information

Specific U.S-based findings:

• 35 percent of respondents have never been offered the option to trade-in their device, the lowest percentage of any of the countries surveyed
• 68 percent of respondents said they’d consider trading in their old devices if there were tighter controls to ensure responsible data management
• 17 percent of respondents are concerned that the data on their old device might be compromised/accessed after trade-in, indicating a false sense of security

The need for tighter regulation for the secondary device market is highlighted by the sheer quantity of illegitimate mobile retail organizations currently looking to buy and sell used devices. These operations regularly buy and sell used devices from consumers without complying with any data security guidelines. Interestingly, when consumers were asked where they would consider selling their used devices, 36 percent admitted they would prefer to sell them directly on eBay or Amazon rather than via mobile operators or specialist online trading sites where consumers have no assurances their data is being properly erased before the device is resold. These often-illegitimate, ungoverned practices undermine trust in the secondary device market and must be properly regulated to preserve and maintain consumer confidence.

“Without a common, mandated and regulated rule book for smartphone processing, the ecosystem will be subject to abuse and malicious attack,” Ernst said. “The current ecosystem is made up of multiple stakeholders that collect devices from various touchpoints and redistribute them to many other parties. Since the speed of device processing is the only critical success factor, and as more devices flood the market, the chances of data breaches or issues related to data misuse will become increasingly likely. The secondary device market remains an amazingly lucrative and exciting opportunity for everyone, but only if it retains full consumer confidence built on trust and data integrity.”

For full analysis, read the report “The Critical Importance of Consumer Trust in the Second-Hand Mobile Market” here: https://www.blancco.com/resources/rs-the-critical-importance-of-consumer-trust-in-the-second-hand-mobile-market/

About the research

The study was commissioned by Blancco Technology Group and conducted independently by Sapio Research in December 2018 and January 2019. Respondents were 5,000 consumers divided equally between the UK, the United States, Germany, India and the Philippines.

About Blancco Technology Group

Blancco is the industry standard in data erasure and mobile device diagnostics. Blancco data erasure solutions provide thousands of organizations with the tools they need to add an additional layer of security to their endpoint security policies through secure erasure of IT assets. All erasures are verified and certified through a tamper-proof audit trail.

Blancco data erasure solutions have been tested, certified, approved and recommended by 18 governing bodies and leading organizations around the world. No other data erasure software can boast this level of compliance with the rigorous requirements set by government agencies, legal authorities and independent testing laboratories.

Blancco Mobile Diagnostics solutions enable mobile network operators, retailers and call centers to easily, quickly and accurately identify and resolve performance issues on their customers’ mobile devices. As a result, mobile retailers can spend less time dealing with technical issues and, in turn, reduce the quantity of NTF returns, save on operational costs and increase customer satisfaction.

Additionally, Blancco Mobile Diagnostics solutions empower mobile processors, 3PLs, Recyclers and Repair & Refurbishment Operations to easily, quickly and accurately process used mobile devices to identify any issues and determine overall value. By incorporating Blancco Mobile Diagnostics, mobile processors automate processes, deliver intelligent routing based on device attributes and increase overall efficiency, while driving incremental revenue and profitability.

Contacts

CCgroup for Blancco Technology Group (UK)
Abbie Godward / Adam Millar
T: +44 (0) 20 3824 9214
E: blancco@ccgrouppr.com

CCgroup for Blancco Technology Group (US)
Lori Scribner
T: +1 619 798 0043
E: blancco@ccgrouppr.com

Blancco Technology Group
Liz Adams, Global Marketing Director
T: +44 (0) 7725 010 412
E: liz.adams@blancco.com