In an attempt to penetrate some of the smartphone markets they are less effective in around the world, American technology giants Apple are planning to launch a new ‘trade-in programme’ that will result with slightly reduced-cost, second-hand iPhones being sold in ‘emerging markets’.
Reporting to Bloomberg, a number of sources have claimed that the new scheme will be trialled first in Apple’s home market of the USA, with customers able to part-exchange older models of the iPhone in order to attain the newest ‘iPhone 5′ edition. There are also strongly vindicated rumours that the new offer is being prepared in time for the (currently unspecified) launch date of the iPhone 5S, which would provide owners with a similar option to trade in their iPhone 5.
This initiative is being operated by Apple with Brightstar, who are said to have experience in similar campaigns with contract providers AT&T and T-Mobile US, though this time their involvement will be to send the devices straight back to where they came from.
The mission from that point for Apple would then be to take their re-acquired old iPhone models (with the 4 & 4S versions likely to be most prominent), and ‘refurbish’ them to sell as as-new products (presumably with a slight price cut) to consumers in emerging markets as ‘demand’ increases. Current high prices no matter where they are is generally seen as a leading reason for having a much lower share in less developed markets, and as such Apple might be attempting to bridge the gap a little before the Apple brand name loses any ‘status appeal’ it had that sees many consumers pay above the odds for their devices.
The trade-in initiative would also be latching onto current trends, according to Bloomberg, who write: “AT&T is currently paying as much as $200 for working iPhone 4s and 4Ss, which could let some customers buy an entry-level iPhone 5 for no money down. [Israel] Ganot [CEO of trade-in service Gazelle] estimates that 20 percent of U.S. consumers buying a smartphone this year will do so using a trade-in, up from 11 percent in 2011.”
Recon Analytics’ Roger Entner agrees with this trend, stating of how it can benefit Apple: “This will help them sell more phones, because it will lower the consumer’s out-of-pocket expense.”
Ganot summarised: “The average consumer in this market cannot afford to buy a new generation device. Many of those markets do not offer subsidies or face high import taxation. The average consumer will end up paying somewhere between $800 and $1,500 [for the best possible version of the latest iPhone].”
While Apple’s efforts in trade-in will currently be American only (and limited to Apple stores) when it comes to ‘input’, it remains to be seen if it will be a successful venture in output both at home and abroad…