Apples iPhone business isnt just about new product sales. The second-user and services markets need to be considered, too. Not only does the company command the first market, but it continues to generate healthy services-related revenue on every iPhone used an estimated$72 per user, per year, according to Morgan Stanley.Theres little doubt the revenue generated by these services can help the company navigate challenging economic times, and it doesnt matter if the device itself is first- or second-hand, so long as users sign up for services.Gone but not forgottenTo get an idea of the scale of the second-user market, I turned toCircana. In data provided byB-Stockand Samsung Electronics America, I found that 11% of US consumers owned a purchased pre-owned device in 2024 as recession-wary consumers seek to acquire high-quality devices at prices they can afford.IDC last year predicted that the used smartphone market will grow 5% a year a stronger rate of growth than for new devices. Its a global trend as acceptance of refurbished and second user smartphones grows.Its not just about money; consumers are increasingly aware of the link between electronic waste and the environment and choose devices that contribute to a more balanced circular economy.That means the second-user market is very large. IDC estimates it was worth $72.9 billion in 2023, when more than 195 million used devices shipped. (It predicts 257 mllion used smartphones will ship worldwide by 2028.) Thats all smartphones, with the lions share coming from Apple and Samsung, reflecting demand in the new device market.When it comes to new, Apple and Samsung remained resilient amid strong flagship demand, reflecting the continued premiumization trend of the market, said Sanyam Chaurasia, senior analyst at Canalys. In the high-end, consumers are increasingly opting for the premium version of the flagship series, helped by vendors clearer differentiating models within their flagship series in an already price-inelastic segment. In Apples case, shipments of the 16 Pro and Pro Max in 2024 were 11% higher than the 15 Pro and Pro Max in 2023, reaching over 55 million units.B-Stock indicated that the second-user market also sees customers purchase the best available devices, relying on the growing availability of easy credit to do so.What do people want?Craig Feely, Samsung Electronics Americas Head of Certified Renewed/Trade-in, explains that when it comes to the secondary market, consumers care about price, battery life, and the residual value of the device. Customers are looking more and more for an affordable smartphone option, he said. We design our products to be easily repaired or recycled.Citing data from Circana, Joe Dube, director for mobile accounts at B-Stock, recently explained that the current market is defined by about 30% of devices sold. That means for every 10 devices, just three reach the second user market.Theres room to grow, he said. Theres a ton of devices out there we want to get back into the circular economy.The economic benefits of second-user devices are clear. They enable consumers to access premium technology at a fraction of the original price. This affordability extends the lifecycle of devices, making technology accessible to a broader audience and reducing the financial burden on consumers.At the Apple StoreIt wasnt terribly long ago that people purchasing new smartphones would primarily do so via their cellular provider. Thats no longer how it is. In the UK, for example, recent CCS Insights data shows more than 20% of UK consumers now purchasedirectly from Apple or Samsung, up from 5% in 2018. Apples online or high-street retail have become more popular destinations for new device purchases than carriers own shops.It now appears that the secondary device market is arcing along the same trajectory, with B-Stock saying people increasingly prefer manufacturer trade-ins to those offered by carriers.This benefits manufacturers, as it means they can pick up older devices at trade in, then recondition and resell them through their own outlets (such as Apples refurbished store) or via partners. Thats a good business, which put bluntly means Apple and Samsung get to sell the same device twice, generating additional income as they do.Another thing that might be of interest to iPhone users: B-Stocks data suggests November to be the very worst time to sell or trade-in an older iPhone, as thats when the secondary market value of those devices declines at the steepest rate, 9.8%.That decline I think reflects the introduction of new Apple devices, which always dent existing second user prices, not least because so many older devices are traded in at that time.Why second-user smartphone sales are good for AppleNot only does the second-user market act as a gateway through which a wider range of customers can begin to use Apples platforms, it also provides Apple with a strong opportunity to attract new customers to its high-margin services.Increasingly, as shoppers choose to trade-in old devices for new, this also gives Apple a chance to renew and resell older iPhones, creating another income stream and adding a few more dollars to the actual revenue it realizes through new device sales. Later, of course, the customer satisfaction levels Apples devices foster also suggests that those coming to its platforms via second-user channels will stay with Apples ecosystem in future, purchasing new hardware when they get the chance.You can follow me on social media! Join me onBlueSky, LinkedIn,Mastodon, andMeWe.