The rapid increase in prices is being reflected by consumer purchasing behavior. The biggest signal so far on how this will play out comes from Japan, where refurbished iPhone sales more than doubled after Appe’s July price hikes. That trend was confirmed by a second report in Japan Times, which reports a huge spike in iPhone sales via the Nicosuma online marketplace.
As that trend asserts itself globally, it will affect new device sales, hurting both down- and upstream manufacturers in the consumer electronic supply chain, creating another vortex of inflationary pressure. Consumers will also wind up using their devices longer and turn to lease and hire schemes in preference to cash or credit to settle high purchase costs.
New consumer habits
This change in behaviour can only go on for so long while new device sales shrink. At some point, it will become apparent that not enough new devices are entering the second user value chain to satisfy demand in that side of the market. The result: an additional inflationary wave, prompting second-user devices to become even more costly as lowering sales of new devices put smaller manufacturers out of business entirely, further reducing competition, denting corporate profits and, conceivably, undercutting tax receipts.
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