Apple (NASDAQ:AAPL) is partnering with wireless device distributor Brightstar to establish an in-store iPhone trade-in program to let customers turn in older models and upgrade to the newer iPhone 5, according to a Bloomberg report.
Brightstar, a global mobile device distributor, manages trade-ins for AT&T Mobility (NYSE:T) and T-Mobile US (NYSE:TMUS), as well as other carriers and OEMs. Sales of older iPhones including the iPhone 4S and iPhone 4 continue to help Apple's sales, especially in emerging markets where they are cheaper than the iPhone 5. U.S. carriers also offer the older models at discounted prices, on both a subsidized and unsubsidized basis. However, such sales carry less margin and profit for Apple.
Apple and Brightstar declined to comment, according to Bloomberg.
As The Verge notes, although Apple has offered a recycling program for iPhones, iPads, Macs and PCs, it has never offered customers a trade-in option where they can get the fair market value on the recycled equipment.
The used iPhones collected in the United States by Apple and Brightstar would be resold in emerging markets, the report said, which would not cut into sales of the iPhone 5 in the U.S. market. "The overall size of this market is increasing rapidly," Israel Ganot, CEO of Gazelle, an online mobile device trade-in company, told Bloomberg.
"The biggest challenge for us has been to change consumer behavior," Ganot told ABC News. "It will be great to see Apple jumping into it. We expect them to put the brand and marketing behind it and lift consumer adoption."
Gazelle often resells devices it collects in the U.S. to emerging markets. "There is insatiable demand there," Ganot said. "The average consumer can't buy the brand-new iPhone. The phones we bring to those markets are much more affordable."
Apple expects to start producing the next version of the iPhone during the second quarter, according to a Wall Street Journal report. The report, which cited unnamed sources familiar with the device's production, said the new iPhone will be similar in size and shape to the iPhone 5. The WSJ report also noted that Apple is still working on a cheaper version of the iPhone that could be launched as soon as the second half of this year, and which may use a different casing and different-colored shells.
Cook has repeatedly downplayed the need for a cheaper iPhone, and has indicated Apple will announce new products this fall. The company is expected to unveil an updated version of its iOS software next week at its annual developer conference.
- see this Bloomberg article
- see this ABC News article
- see this The Verge article
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