
To set the background,
here’s how the program works:
While other outlets
like Best Buy and carrier-run stores offer iPhones for sale, Apple’s trade-in
program is only available from its retail stores. The service is offered at
Apple retail locations either on the store floor or at the store Genius Bar.
After visiting a retail store and meeting with an Apple employee, a customer explains
that they would like a new phone and are willing to trade in their old one. The
Apple employee will then inspect the phone, ensuring that it powers on and is
free of water damage, and then set a value for the phone based on color,
physical shape, and overall cleanliness, assuming it functions properly. Apple
has partnered with a repurposing company called BrightStar, who is able to
provide real-time pricing information for trade-ins based on its own market
analysis and forecasts; this process takes place on the EasyPay devices that all
Apple employees tote around the store. Currently BrightStar is offering around
$250 for a 16BG iPhone 5, and all iPhone generations, so long as they work,
will generate some value. iPhones with broken displays or other significant
physical defects will also generate an offer from Apple, though the value will
be considerably less.
While similar in
principle, there are a few differences between Apple’s new program and the
existing buy-back programs from Gazelle and NextWorth. For one, Gazelle and
NextWorth operate solely online; their users mail in products, receive
estimates, and either request their devices back or receive an electronic
payment. Apple’s program operates from physical locations, and users receive
any payment via Apple credit. Consumers can get their new iPhone for a
discounted price or even for free after trading it in, and any remaining
balance after the purchase goes on to an Apple gift card. Secondly, and not so
favorable for Apple, Apple’s new trade-in program is limited to iPhones, while Gazelle
and NextWorth will purchase both Apple and non-Apple devices. Finally, and really not favorably for Apple, is the
difference in the prices offered for old devices. Competitors like Amazon,
Gazelle, NextWorth, and Best Buy are offering between $315 and $400 for a 16 GB
iPhone 5 in good condition. How does Apple plan to compete by buying back a
limited number of products compared to others in the field and offering less
money for them?
For starters, Apple considers
this program part of its “reuse and recycling” program. This program’s purpose
is not solely to save trees; there are numerous incentives for Apple to
roll-out this trade-in program. In
addition to the benefit of an environmentally responsible image, Apple, through
this program, simplifies the trade process and makes it very easy for many
iPhone users to stay loyal to the company. Consumers can just walk in to an
Apple store, trade-in their old iPhone and walk out with a new device.
Convenience is a major leg-up that Apple holds over the competition. One can
utilize this program and skip out on the hassles that come with payment
security, shipping and receiving, service charges, and other pain points that
are associated with the online buy-back market. Yes, Apple is offering a lower
price through their trade-in program, and yes, they are selective in the fact
that they will only accept iPhones for trade-in, but a significant amount of
consumers will choose convenience over value. Overall, the convenience and
immediacy of this program will combine to drive consumers to utilize this
program and companies that make profits from iPhone resale’s should definitely
expect to take significant hit.
NextWorth does not "operate solely online". It has partnered with over 1500 stores, including Target!
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