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Why companies give you big money for your old iPhone

But for those who want to spend less – in any case, absolutely – to upgrade, Apple (AAPL) and major wireless carriers are offering huge discounts to traders on their old devices.
T-Mobile (TMUS) at Verizon (VZ) offers customers trade-in credit from $ 200 to $ 850, depending on how old their phone is and whether they already have a carrier plan. In the meantime, AT&T will be able to provide customers with a free phone if they commit to an unlimited data plan for 30 months while also trading on older phones for at least $ 95. (AT&T (T) owns CNN̵
7;s parent company, WarnerMedia).

Apple and other smartphone makers also offer their own trade-in programs, as do some third-party resellers. Apple is currently offering discounts of up to $ 500 for the iPhone 12 lineup if you trade in your old smartphone, depending on its age and condition.

The trade-in values ​​of old smartphones can be surprisingly high as trade-in has become a critical piece of device lifecycle. Beyond giving users a chance to get a new phone for a fraction of its price, it helps companies boost sales by driving more frequent upgrades , gives carriers a way to attract customers to long contracts, delivers more affordable devices for the secondary market and provides raw materials that companies can reuse to make them more environmentally friendly the new phones.

The push push

Trade-in programs provide wireless carriers and manufacturers a way to attract new customers and prevent existing customers from switching to their products – as we saw in AT & T’s free deal on iPhones .

“This is probably the closest thing to reviving subsidies, which crammed into the US when the iPhone first hit the market,” said David McQueen, director of research at tech advisory firm ABI Research.

A major issue that trade-in aims to address is the growing tendency of smartphone users to hold their devices longer, often skipping a model or two (sometimes more) before purchasing new.

“Motivation for subscribers to upgrade smartphones has been a problem over the past few years with most flagships having very little difference in their predecessors,” McQueen said.

The iPhone 12 has 5G.  But not everyone will notice
While companies expect 5G speeds and features to provide ample reason to upgrade, industry estimates point to the fact that such capability is not really a significant factor for consumers. The continued proliferation of 5G networks around the world, and the limited use cases for smartphones compared to more advanced technologies such as self-drive cars, are likely to reduce the appeal for some people to switch pa.

“So far no one was able to send in the perfect solution, which is not strange [carriers] to upgrade to 5G in addition to 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 big draw, trade-ins could help move further upgrades.

Back to the market

Smartphones often have a shelf life and utility that exceeds the frequency of new model releases, giving companies an additional source of revenue even for older devices.

Apple shipped more than 11 million devices for replacement in 2019, according to the company’s latest environmental report.

McQueen said phones not resold by smartphone carriers or companies could also end up with insurance firms to replace lost or broken devices for their customers or shipped to emerging markets where Consumers tend to be more price aware.

Much 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.
iPhone 12: What you need to know about Apple's new 5G phone lineup

The updated phone programs also sell to users who are willing to buy slightly older premium models, according to analysts.

“[It’s] kind of like 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.” They are allowed to be more lively, in a sense, without having to pay $ 700 or more to buy into the current generation. ”

And this is a trend that appears to be gaining momentum. Research firm IDC predicted earlier this year that there would be approximately 333 million smartphone devices sold in 2023 – nearly double the number sold in 2018 – for a total market value of $ 67 billion .

What is important inside?

Another reason why old phones are important to companies is for what they have.

Apple is working to prevent the environmental impact of its massive global manufacturing operations, expanding its recycling programs and promises to be completely carbon neutral by 2030

“Manufacturers place more emphasis on this, they talk about the recycled materials they use to make their phones,” Rubin said.

As part of that effort, Apple made this commitment to sustainability in the event of the iPhone launch on Tuesday, boasting that the magnets in the iPhone 12 lineup are all made from 100% recycled rare earth materials . For many years, the company developed and demonstrated robots that removed older iPhones and separated components that could be repurposed for new devices. The company also recycles other materials such as aluminum and tungsten used in new products.

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