But for people who want to spend even less – in one case, absolutely nothing – to upgrade, Apple and the big wireless operators are making big discounts for those who trade with their older devices.
T-Mobile and Verizon offer their customers trading credits ranging from $ 200 to $ 850, depending on how old their phone is and whether they already have a plan with the operator. AT&T, meanwhile, will effectively provide customers with a toll-free phone if they commit to an unlimited data plan for 30 months, while also trading older phones worth at least $ 95. (AT&T owns CNN̵
Apple and other smartphone makers also offer their own trading programs, as do some third-party resellers. Apple currently offers discounts of up to $ 500 for the iPhone 12 line if you trade with your old smartphone, depending on its age and condition.
The trading values of older smartphones can be surprisingly high because trading has become a critical part of the device’s life cycle. In addition to giving consumers the opportunity to get a new phone for a fraction of its price, it helps companies drive sales by hinting at more frequent upgrades, giving carriers a way to attract customers to long contracts, and delivering more affordable devices to secondary markets. and provides raw materials that companies can reuse to make new phones more environmentally friendly.
Push to upgrade
Retail programs give wireless operators and manufacturers a way to attract new customers and prevent existing customers from giving up their products – as we saw in AT&T’s free iPhone deal.
“This is probably the closest thing to reviving subsidies that were widespread in the United States when the iPhone first hit the market,” said David McQueen, director of research at technology consulting firm ABI Research.
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A major problem that the goal of the trade is to solve is the growing tendency of smartphone users to keep their devices longer, often skipping a model or two (sometimes even more) before buying a new one.
“Motivation for subscribers to upgrade smartphones has been a problem for the past few years, as most flagships have very little differentiation from their predecessors,” McQueen said.
While companies hope that 5G speeds and features provide ample reason to upgrade, industry forecasts point to the fact that such capability is not really such an important factor for consumers. The still emerging proliferation of 5G networks around the world and the limited use of smartphones compared to more advanced technologies such as self-driving cars are likely to reduce the attractiveness of some people to switch only now.
“At the moment, there doesn’t seem to be a real reason shown by (carriers) to upgrade to 5G, except that it’s being marketed as another ‘G’,” McQueen added.
It’s too early to know how well the iPhone 12 line will sell, but if 5G isn’t a huge attraction, the exchange could help with additional upgrades.
Back on the market
Smartphones often have a shelf life and usefulness that exceeds the frequency of new models, giving companies an additional source of revenue even for older devices.
Apple has shipped more than 11 million devices to be repaired in 2019, according to the company’s latest environmental report.
McQueen says phones that are not resold by carriers or smartphone companies could also end up in insurance companies to replace lost or broken devices for their customers or be shipped to emerging markets where consumers tend to have greater consciousness.
Most of the growth in the updated smartphone market last year came from regions such as India, Latin America and Africa, according to a recent report by Counterpoint Research.
The programs also sell refurbished phones to consumers who want to buy slightly older premium models, according to analysts.
“It’s kind of like the used car market; there are people who prefer to have an older 2021 Mercedes Hyundai,” said Ross Rubin, chief analyst at Reticle Research. “It allows them to be more ambitious, in a sense, without having to pay $ 700 or more to buy in the current generation.”
And this is a trend that seems to be intensifying. Research firm IDC predicted earlier this year that there would be about 333 million used smartphones sold in 2023 – almost twice as many as sales in 2018 – at a total market value of $ 67 billion.
What’s inside matters
Another reason why old phones are valuable to companies is what is in them.
Apple is working to limit the environmental impact of its huge global manufacturing operations, expanding recycling programs and promising to be completely neutral by 2030.
“Manufacturers put more emphasis on this focus, they talk about the recycled materials they use to make their phones,” Rubin said.
As part of that effort, Apple highlighted this commitment to sustainability during the iPhone launch event on Tuesday, boasting that all magnets in the iPhone 12 line are made from 100% recycled rare earth materials. For several years, the company has been developing and showcasing robots that take down older iPhones and release components that can be reassigned to new devices. The company also recycles other materials such as aluminum and tungsten, which are used in the new products.