“Apple Inc. is reportedly preparing a long-rumored iPhone trade-in program ahead of an expected launch of new devices next month — a program that could hedge part of the company’s lucrative smartphone business against an onslaught of competition from cheaper rivals,” Dan Gallagher writes for MarketWatch.

“Such programs can cut the retail price of a new smartphone in half — depending on the model and condition of the phone being traded in — and allow carriers to hold on to their subscriber base and reduce the dreaded “churn” of customers flipping between carriers in hunts for cheaper deals.,” Gallagher writes. “For Apple, a trade-in could provide a two-fold benefit of allowing one segment of customers a cheaper way to stay with the iPhone, while allowing older, used models to be recycled to price-conscious customers in other markets.”

Gallagher writes, “A key factor for Apple may be whether the company has control over how and where its used iPhones are sold. It is common for third-party brokers to buy up used devices and re-sell them into new markets. Toni Sacconaghi of Bernstein says Apple may be able to mitigate its risk with used iPhones by controlling which markets the older devices go into, and what prices [at which] they are sold.”

Read more in the full article here.

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