Monday, September 2, 2013

Apple Will Pay for Old IPhones. Is It a Good Deal? $AAPL $MSFT $GOOG $RFMD $CRUS

Apple Will Pay for Old IPhones. Is It a Good Deal? $AAPL $MSFT $GOOG $RFMD $CRUS

Apple has several reasons to do this. It will give the company a source of gently used devices that it can sell in overseas markets, which are becoming more important as Western markets become saturated with smartphones. The industry is increasingly interested in their customers’ old phones for this very reason. When T-Mobile(TMUS) announced a plan to allow its customers to trade in their devices more often, an executive at the company said creating a market for used phones was one of the reasons for doing so.Apple already offers a recycling program through its website. But giving customers a way to trade in their phones for immediate credit toward a newer model will give them an incentive to get into Apple’s retail stores, be tempted by high-margin accessories, and basically tighten their relationship with Apple itself. Apple’s gain could end up being a loss for the wireless carriers that sell iPhones through their own retail locations. A trade-in program could also keep iPhone customers from defecting to other manufacturers, particularly Samsung (005930:KS). Of course, this hasn’t been a huge problem for Apple: A survey done for Fortune this month found 20 percent of new iPhone customers had switched from Android, while only7 percent of people buying Samsung phones were Apple defectors.

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