The trade-in values of older smartphones can be surprisingly high, as the trade-in has become an essential part of the device’s lifecycle. As well as providing users with the ability to get a new phone for a fraction of its price, it helps businesses increase sales by incentivizing more frequent upgrades, gives carriers a way to attract customers to new ones. long contracts, provides more affordable devices for secondary markets and provides raw products. materials that businesses can reuse to make new phones greener.
The upgrade push
Trade-in programs give wireless carriers and manufacturers a way to attract new customers and prevent existing customers from turning away from their products – as we’ve seen with the free iPhone bundle of ‘AT&T.
“This is probably the closest thing to the subsidy revival, which was plaguing the United States when the iPhone first hit the market,” said David McQueen, research director for the company. ABI Research technology consultancy.
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A major problem the exchanges aim to address is the growing tendency for smartphone users to hold onto their devices for longer, often skipping a model or two (sometimes even more) before purchasing a new one.
“Motivating subscribers to upgrade smartphones has been a problem in recent years, with most flagships having very little difference from their predecessors,” said McQueen.
While companies are hoping that 5G’s speeds and features provide enough reason to upgrade, industry estimates indicate that this capability isn’t really such a big factor for consumers. The still nascent spread of 5G networks around the world and the limited use cases of smartphones compared to more advanced technologies such as self-driving cars will likely reduce the appeal for some people to switch for now.
“At the moment, there doesn’t seem to be any real reason given by (operators) to switch to 5G other than being marketed as just another ‘G’,” McQueen added.
It’s too early to know how well the iPhone 12 lineup will sell, but if 5G isn’t a huge draw, the exchanges could help move further upgrades.
Back on the market
Smartphones often have a lifespan and utility that goes well beyond the frequency of new model releases, providing businesses with an additional source of revenue even for older devices.
Apple sent over 11 million devices for refurbishment in 2019, according to the company’s latest environmental report.
McQueen says phones that aren’t resold by carriers or smartphone companies could also end up with insurance companies to replace devices that are lost or broken for their customers or sent to emerging markets where consumers tend to. be more price conscious.
Most of the growth in the refurbished smartphone market over the past year has come from regions such as India, Latin America and Africa, according to a recent report by Counterpoint Research.
The programs also sell refurbished phones to users who want to purchase slightly older premium models, analysts say.
“(It’s) a bit like the used car market; there are people who prefer to have a Mercedes older than a Hyundai 2021, ”said Ross Rubin, senior analyst at Reticle Research. “It allows them to be more ambitious, in a sense, without having to pay the $ 700 or more to buy the current generation. ”
And this is a trend that seems to be strengthening. Research firm IDC predicted earlier this year that there would be around 333 million used smartphones sold in 2023 – almost double the number sold in 2018 – for a total market value of $ 67 billion.
What’s inside matters
Another reason old phones are valuable to businesses is their content.
Apple is working to reduce the environmental impact of its massive global manufacturing operations, by expanding recycling programs and committing to become completely carbon neutral by 2030.
“Manufacturers have put more emphasis on this goal, they are talking about the recycled materials they use to produce their phones,” said Rubin.
As part of that effort, Apple touted this commitment to sustainability when the iPhone launched on Tuesday, boasting that the magnets in the iPhone 12 line are all made from 100% recycled rare earth materials. For several years, the company has been developing and presenting robots that take apart old iPhones and separate components that can be reused for new devices. The company also recycles other materials such as aluminum and tungsten which are used in new products.