Radiowell Forecasts Values of Used Radios to Plummet in 2024

NEW YORK, Jan. 10, 2024 /PRNewswire/ -- Radiowell, America's largest buyer of surplus and used two-way radio equipment, forecasted a correction in used-radio prices in 2024. The company cautioned that industry headwinds will cause prices to recede to historically low levels, well below the post-COVID spike experienced in 2021?2022.

Many public networks have transitioned to P25 Phase 2 (TDMA) - or have plans to do so. This means that existing P25 equipment is obsolete and cannot be repurposed. "Like many emerging technologies, the initial transition to TDMA was slow, but now it's quick and reached critical mass," explains Radiowell spokesperson, Andrew Park. "In addition to the sunsetting of P25, we are also seeing new DMR standards emerge, thus rendering old equipment obsolete at the quickest pace in recent memory."

Another headwind comes from radio parts availability. Post-COVID supply constraints have eased significantly, with many supply chains returning to normal as chip and other shortages end. Some manufacturers have surplus inventory while others have transitioned to a new normal of reduced or "disciplined" production. While there are exceptions, they are mostly by manufacturers focusing on more-profitable production and allocating lower priority to less profitable parts. But in any scenario, the long backorders seen in 2021-22 ended in 2023.

2024 also brings the planned obsolescence of popular models from major manufacturers. Many once-coveted models can no longer be repaired or maintained, encouraging equipment owners to abandon them as quickly as possible. "Long gone are the days of long-tail analog life cycles...now product cycles are more like iPhones," explains Park.

And worthy of noting, Radiowell forecasts "subscription as a service" models further depressing prices. These SaaS models are similar to cellular phone contracts, restricting access to only certain radios and rarely allowing use of a client's existing equipment.

There will be a flood of unusable equipment in 2024, making it the worst year for values in recent memory. Park explains, "We caution anyone with capital at risk to reevaluate their exposure to what will be a difficult environment in 2024 and likely beyond. Lenders and finance companies should consider accelerated depreciation, asset markdowns, and other asset valuation techniques."

Companies and government agencies seeking solutions for their used radio equipment should complete the Sell Used Radios form to learn how their decommissioned radios can be repurposed for maximum value and environmental impact. Radiowell specializes in asset disposition of used radios.

SOURCE Radiowell