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Apple Said to Plan iPhone Trade-Ins to Lift Sales
Apple Inc. (AAPL) (AAPL) is starting an iPhone trade-in program this month aimed at getting users to upgrade to the iPhone 5 and turn in older models, people with knowledge of the plans said.
Apple has teamed up with Brightstar Corp. (STAR), a mobile-phone distributor, to run the exchange program, said the people, who asked not to be identified because Apple hasn’t publicly announced the plan.
Brightstar also handles trade-ins for AT&T Inc. (T) (T) and T-Mobile US Inc. (TMUS) (TMUS), as well as other carriers and device makers, amid brisk demand for refurbished iPhone 4s and 4Ss in emerging markets. By offering money for older smartphones, Apple and the wireless companies are seeking to entice consumers to upgrade to the latest models, while profiting through resales abroad.
“The overall size of this market is increasing rapidly,” said Israel Ganot, chief executive officer of Gazelle Inc., an online mobile device trade-in company.
Amy Bessette, a spokeswoman for Cupertino, California-based Apple, and Patrick Foarde, a Brightstar spokesman who works for Ketchum Inc., declined to comment.
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. Ganot 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.
Until now, Apple paid little attention to the refurbished iPhone market. That’s changing as Apple’s growth has slowed in recent quarters. Samsung Electronics Co. (005930) became the best-selling smartphone brand in the U.S. in May, T. Michael Walkley, an analyst at Canaccord Genuity Inc., wrote in a report this week.
[h=2]Refurbished Phones[/h]Trade-in programs are used to support sales of new hardware in mature markets such as the U.S., where many prospective customers already own a smartphone. Used iPhones collected in the U.S. will only be resold in emerging markets, where Apple’s share is lower and demand for cheap devices is greater, said one of the people. That way, the resale of Apple’s older models won’t cannibalize iPhone 5 sales in the U.S., the person said.
Apple runs a Web-based recycling service, in a partnership with Roseville, California-based PowerOn Services Inc., offering to pay people for their used iPhones, iPads or Macs. The new trade-in program with BrightStar will only be available at Apple’s retail outlets, letting consumers receive payments instantly and avoiding the hassle of shipping their older gadgets, the people said.
Apple also worked with Brightstar to help AT&T and T-Mobile with their recent trade-in promotions, said the people.
[h=2]Global Demand[/h]Brightstar set up its trade-in division a year ago and is on track to buy and resell more than 15 million devices this year, according to Bela Lainck, president of the buyback and trade-in business at Miami-based Brightstar.
The company collects 80 percent of its used devices in the U.S., and resells most of them through distribution centers in 50 countries, Lainck said in an interview in late May. Brightstar also owns an auction house in Hong Kong, and a division that provides refurbished phones to insurance companies seeking inventory for clients who have lost or broken a smartphone.
“The iPhone is an iconic device that people around the world want to own,” said David Edmondson, CEO of eRecyclingCorp, another trade-in processor. “If they can’t afford a new Mercedes, they’ll get a used one.”
To contact the reporter on this story: Peter Burrows in San Francisco at [email protected]
To contact the editor responsible for this story: Tom Giles at [email protected]
Enlarge image
[h=3]Apple Said to Plan IPhone Trade-Ins for First Time to Lift Sales[/h]
Tomohiro Ohsumi/Bloomberg
By offering money for older smartphones, including iPhone 4S smartphones, seen here, Apple Inc. and the wireless companies are seeking to entice consumers to upgrade to the latest models, while profiting through resales abroad.
By offering money for older smartphones, including iPhone 4S smartphones, seen here, Apple Inc. and the wireless companies are seeking to entice consumers to upgrade to the latest models, while profiting through resales abroad. Photographer: Tomohiro Ohsumi/Bloomberg
Play
Apple Said to Plan iPhone Trade-Ins to Lift Sales
Apple Inc. (AAPL) (AAPL) is starting an iPhone trade-in program this month aimed at getting users to upgrade to the iPhone 5 and turn in older models, people with knowledge of the plans said.
Apple has teamed up with Brightstar Corp. (STAR), a mobile-phone distributor, to run the exchange program, said the people, who asked not to be identified because Apple hasn’t publicly announced the plan.
Brightstar also handles trade-ins for AT&T Inc. (T) (T) and T-Mobile US Inc. (TMUS) (TMUS), as well as other carriers and device makers, amid brisk demand for refurbished iPhone 4s and 4Ss in emerging markets. By offering money for older smartphones, Apple and the wireless companies are seeking to entice consumers to upgrade to the latest models, while profiting through resales abroad.
“The overall size of this market is increasing rapidly,” said Israel Ganot, chief executive officer of Gazelle Inc., an online mobile device trade-in company.
Amy Bessette, a spokeswoman for Cupertino, California-based Apple, and Patrick Foarde, a Brightstar spokesman who works for Ketchum Inc., declined to comment.
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. Ganot 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.
Until now, Apple paid little attention to the refurbished iPhone market. That’s changing as Apple’s growth has slowed in recent quarters. Samsung Electronics Co. (005930) became the best-selling smartphone brand in the U.S. in May, T. Michael Walkley, an analyst at Canaccord Genuity Inc., wrote in a report this week.
[h=2]Refurbished Phones[/h]Trade-in programs are used to support sales of new hardware in mature markets such as the U.S., where many prospective customers already own a smartphone. Used iPhones collected in the U.S. will only be resold in emerging markets, where Apple’s share is lower and demand for cheap devices is greater, said one of the people. That way, the resale of Apple’s older models won’t cannibalize iPhone 5 sales in the U.S., the person said.
Apple runs a Web-based recycling service, in a partnership with Roseville, California-based PowerOn Services Inc., offering to pay people for their used iPhones, iPads or Macs. The new trade-in program with BrightStar will only be available at Apple’s retail outlets, letting consumers receive payments instantly and avoiding the hassle of shipping their older gadgets, the people said.
Apple also worked with Brightstar to help AT&T and T-Mobile with their recent trade-in promotions, said the people.
[h=2]Global Demand[/h]Brightstar set up its trade-in division a year ago and is on track to buy and resell more than 15 million devices this year, according to Bela Lainck, president of the buyback and trade-in business at Miami-based Brightstar.
The company collects 80 percent of its used devices in the U.S., and resells most of them through distribution centers in 50 countries, Lainck said in an interview in late May. Brightstar also owns an auction house in Hong Kong, and a division that provides refurbished phones to insurance companies seeking inventory for clients who have lost or broken a smartphone.
“The iPhone is an iconic device that people around the world want to own,” said David Edmondson, CEO of eRecyclingCorp, another trade-in processor. “If they can’t afford a new Mercedes, they’ll get a used one.”
To contact the reporter on this story: Peter Burrows in San Francisco at [email protected]
To contact the editor responsible for this story: Tom Giles at [email protected]
Enlarge image
[h=3]Apple Said to Plan IPhone Trade-Ins for First Time to Lift Sales[/h]
By offering money for older smartphones, including iPhone 4S smartphones, seen here, Apple Inc. and the wireless companies are seeking to entice consumers to upgrade to the latest models, while profiting through resales abroad.
By offering money for older smartphones, including iPhone 4S smartphones, seen here, Apple Inc. and the wireless companies are seeking to entice consumers to upgrade to the latest models, while profiting through resales abroad. Photographer: Tomohiro Ohsumi/Bloomberg