Samsung will launch a program to sell used flagship phones as early as next year, according to Reuters. But whether that program will be an entirely new initiative or simply an extension of its existing used-phone sales business is unclear.
The South Korean vendor hopes to maximize cost efficiencies and maintain an operating margin above 10 percent as a response to slowing worldwide smartphone sales. Citing an unnamed “person with direct knowledge of the matter,” Reuters reported Samsung will refurbish high-end phones that have been returned from users under the company’s upgrade program.
Samsung maintains an upgrade program for users in South Korea and the U.K. who buy the Galaxy S7 or S7 Edge through the company’s 24-month installment plan. Customers pay roughly $6 a month in addition to the phone payments and can trade in their existing phones and upgrade to a new Galaxy S or Galaxy Note device after a year.
Samsung also offers an upgrade program in the U.S. for its Tab S2, but the vendor has yet to launch a similar offering for its smartphone customers in America.
And the world’s No. 1 smartphone manufacturer already sells “certified pre-owned” handsets through its website, as Samsung employee Philip Berne noted via Twitter. U.S. customers can buy a used Galaxy S6 with 32 GB of storage for $450, for instance, marking a $200 discount from the price of a new model.
Samsung recently posted $5.2 billion in net profit during the most recent quarter, up 1.7 percent over the same period a year ago, due largely to the success of its flagship Galaxy S7 phone. And it led all smartphone vendors with roughly 80 million units shipped worldwide during the period, according to Canalys.
Expanding its sales of used handsets could help Samsung better compete in emerging markets such as India, where smartphone penetration remains relatively low and where price points are crucial, as Reuters noted. But Samsung could risk cannibalizing sales of its cheaper handsets in such markets if users opt to buy used high-end devices rather than new devices with less impressive specs.
- see this Reuters report