But for people who want to spend even less – in one case absolutely nothing – to upgrade, Apple and larger wireless operators are offering big discounts to those who trade in their old devices.
T-Mobile and Verizon offer customers swap credits from $ 200 to $ 850 depending on how old their phone is and whether they already have a plan with the carrier. In the meantime, AT&T will effectively provide customers with a 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 manufacturers also offer their own trade-in applications, as do some third-party retailers. Apple is currently offering discounts of up to $ 500 on the iPhone 12 range if you shop in your old smartphone depending on its age and condition.
The replacement values for old smartphones can be surprisingly high because the replacement has become a critical piece of the device’s life cycle. In addition to giving users an opportunity to get a new phone for a fraction of the price, it helps companies increase sales by requesting more frequent upgrades, provides airlines a way to lure customers to long contracts, delivers more affordable devices to secondary markets and supplies raw materials that companies can recycle to make new phones more environmentally friendly.
Swap programs give wireless operators and manufacturers a way to lure new customers and prevent existing customers from switching away from their products – as we saw with AT & T’s free iPhone deal.
“It’s probably the closest thing to reviving subsidies that were widespread in the United States when the iPhone first hit the market,” said David McQueen, research director at technology consulting firm ABI Research.
Apple tracks iPhones stolen from its stores
A major problem that exchanges aim to tackle is the growing tendency of smartphone users to hold on to their devices for extended periods of time and often skip a model or two (sometimes even more) before buying a new one.
“Motivation for subscribers to upgrade smartphones has been an issue in the last few years, with most flagships having very little differentiation with their predecessors,” McQueen said.
While companies hope that 5G speeds and features provide sufficient reason to upgrade, industry estimates suggest that such capacity is not really that important to consumers. The ever-expanding proliferation of 5G networks around the world and the limited use cases of smartphones compared to more advanced technology such as self-driving cars are likely to lessen the appeal for some people to switch over yet.
“At the moment, there seems to be no real reason shown by (the carriers) to upgrade to 5G other than it being marketed as just another ‘G’,” McQueen added.
It’s too early to know how well the iPhone 12 line will sell, but if 5G is not a big move, replacements could help move further upgrades.
Back on the market
Smartphones often have a durability and utility that goes far beyond the frequency of new model releases, giving companies an extra source of revenue, even for older devices.
Apple shipped more than 11 million units to be refurbished in 2019, according to the company’s latest environmental report.
McQueen says phones that are not resold by airlines or smartphone companies can also end up with insurance companies to replace lost or damaged devices for their customers or shipped to new markets where consumers tend to be more price conscious.
Most of the growth in the refurbished smartphone market last year came from regions such as India, Latin America and Africa, according to a recent report from Counterpoint Research.
The programs also sell refurbished phones to users willing to buy slightly older premium models, according to analysts.
“(It’s like the used car market; there are some people who would rather have an older Mercedes than a 2021 Hyundai,” said Ross Rubin, chief analyst at Reticle Research. “This allows them to be more ambitious on a way without having to pay $ 700 or more to buy into the current generation. “
And that’s a trend that’s likely to get stronger. Research firm IDC predicted earlier this year that about 333 million used smartphones will be sold in 2023 – almost double the number sold in 2018 – for a total market value of $ 67 billion.
What is inside matters
Another reason why old phones are valuable to businesses is what is in them.
Apple has worked to limit the environmental impact of its massive global manufacturing activities, expand recycling programs and promised to become completely CO2-neutral by 2030.
“Manufacturers have emphasized this focus more, they’re talking about the recycled materials they use to produce their phones,” Rubin said.
As part of this effort, Apple announced this commitment to sustainability during Tuesday’s iPhone launch event and boasted that the magnets in the iPhone 12 series are all made from 100% recycled rare earth materials. For several years, the company has been developing and demonstrating robots that remove older iPhones and separate the components that can be reused for new devices. The company also recycles other materials such as aluminum and tungsten used in new products.