A new survey shows that trade-in programs may help sway customers’ loyalty as Apple is rumored to be considering a retail trade-in program to lure more iPhone shoppers to its retail stores. The recently released report by the New York-based NPD Group highlights the growing importance of trade-in programs in the fight for retail store smartphone sales. Of those surveyed, 55% of the people said that they would use a trade-in program for their next upgrade, while more than 60% said that a better trade-in offer would sway their choice of retailers.
The report entitled “Trade In, Trade Up, Trade Out” is based on a survey of 1,000 smartphone users conducted in July. According to NPD’s Eddie Hold, trade-ins are “the new competitive battlefield” for smartphone sales. All of the major U.S. carriers recently launched similar programs aimed at making it easier for consumers to upgrade their devices every year and Apple is reported gearing up to partner with Miami-based Brightstar Corp. to offer an in-store trade-in program.
The program is rumored to give consumers the option to cash in exchange for their old iPhones, bringing new customers in to Apple’s stores. The move would also allow Apple to profit from the lucrative smartphone resale market, which ships unlocked previous-generation handsets overseas, where customers prefer unsubsidized smartphones. Brightstar also runs trade-in programs for AT&T and T-Mobile as of right now. Both carriers value an iPhone 4S to be traded-in around $200, though there is no indication of how Apple’s offering will compare. This is somewhat lower than third-party trade-in prices, with companies like Amazon offering up to $300 for a 16GB iPhone 4S ahead of an expected iPhone refresh this upcoming fall.
As of right now, less than 15% of iPhones sold in the U.S. are moved via Apple’s retail stores, a figure which Tim Cook is concerned about. In response, Apple has started to push its retail employees to talk to customers about upgrade opportunities if they bring their iPhone in to a Genius Bar for repairs. This rumored program could be another piece to Apple’s apparent efforts to boost iPhone sales at its own retail stores. When asked about the rumored trade-in program during his company’s most recent quarterly earnings conference call, Cook unsurprisingly declined to confirm whether or not his company plans to launch one. Cook mentioned the following:
There are a number of channels that do trade-in programs now not only in the U.S., but in different regions. And the reason that it's so attractive around the iPhone is the residual value of an iPhone stays so high, and there is so much demand for it, and so that makes the trade-in programs more lucrative to a win-win from many points of view. But we haven't announced anything about us.
Source: NPD Group