Used device market held back by lack of data security regulations

Mobile device users across the world are sceptical about trading in their old device because they are concerned that data on those devices may be accessed or compromised after they hand it over.

That's according to a global study from Blancco, which found that 66% of the 5000 polled consumers express concern about data compromise or access to the device after trade-in.

However, 64% say they would be more willing to trade-in their devices if there were more stringent data management processes.

The findings are particularly significant for mobile operators, OEMs and third-party logistics providers who deal in used and refurbished devices.

Accounting to IDC, the worldwide refurbished market could be worth US$52.7 billion by 2022, so there is a clear need for strong data management processes to be put in place.

"The secondary mobile device market is a huge success story," says Blancco's EVP products and technology, Russ Ernst.

"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.

There are also many illegitimate mobile retail organisations that buy and sell used devices without following any data security guidelines.

The survey found that 36% of consumers admitted they would prefer to sell their devices on platforms such as eBay and Amazon, rather than through mobile operators or specialist online trading sites.

These often-illegitimate, ungoverned practices undermine trust in the secondary device market and must be properly regulated to preserve and maintain consumer confidence, Blancco states.

Ernst adds that there needs to be a common, regulated, and mandated rulebook for smartphone processing, or else the ecosystem is vulnerable to abuse and malicious attacks.

"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."

The majority (59%) of survey respondents also believe there should be stronger data controls in order to prevent breaches of their personal information.

"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," Ernst concludes.

The statistics are from Blancco's The Critical Importance of Consumer Trust in the Second-Hand Mobile Market report.