Over the last few weeks, the U.S. and China trade-war has reached new heights due to significant steps being made against Chinese technology manufacturer, Huawei. Due to a U.S. administration ban against the Chinese technology company, many are anticipating major implications for global smartphone makers and consumers across the board. In fact, many speculate that the Huawei ban is likely to result in the global increase in the price of first-hand mobile devices. When significant developments happen within the device industry, like the banning of a manufacturer or trade-war, there is always a chance of a domino effect hitting the secondary device industry.
While China’s prices could go up from the increase of tariffs placed on U.S. devices, the U.S. could expect the cost of manufacturing to grow, as a result of moving away from Chinese manufacturers. And in an age where U.S. consumers are holding on to their phones for an average of three years, we can expect OEMs to take a significant hit in their sales which may lead to some manufacturers opting to cease annual flagship releases.
However, while these possibilities sound bleak, there is some light at the end of the tunnel. If device trade-ins slow down, this could mean that the demand for cheaper alternatives, like pre-owned devices, could thrive. And as the demand for pre-owned devices grows, so will the value. Additionally, as a result, operators can incentivize their customers to trade-in their devices for a higher credit than previously offered.