Feature

Why Apple wants to buy your old iPhone and give you a new one

It's not out of the goodness of Tim Cook's heart

In what seems like an effort to make you feel insecure about whipping out an old iPhone in public, Apple is reportedly launching a new trade-in program that allows you to turn in older models at its retail stores in exchange for credit to purchase an iPhone 5.

Apple has reportedly teamed up with a company called Brightstar Corp., a mobile-phone distributor that will be charged with running the exchange program. According to anonymous sources speaking to Bloomberg, customers will be able to sell back their old iPhone 4s and 4Ss in exchange for a shiny new iPhone 5 beginning this month. The exact terms of the trade-in program haven't been disclosed, so it's unclear how much credit participants will get toward a newer device.

Brightstar, however, already has a buyback program in place with AT&T and T-Mobile to redistribute older phones in emerging markets. And Apple already offers cash or in-house credit for old devices through its web-only Reuse and Recycle program, but that requires users to mail in gadgets themselves.

So what's sparking the new in-store trading initiative?

Part of it may have to do with boosting sales. Israel Ganov, chief executive of Gazelle, a Cambridge, Mass., firm that buys old gadgets, tells Computerworld that the discount towards a new iPhone will help "accelerate sales and drive up their share in places like the U.S., where the smartphone market is getting saturated."

Meanwhile, old, traded-in phones will be refurbished and resold to customers in emerging markets, such as Asia, Africa, and South America, where smartphone adoption is still in its early stages. By capturing new customers and locking them into iOS early, Apple could theoretically snag two users for the cost, very roughly speaking, of producing a single new device.

Plus, for the consumer, trading in an old phone for a new model makes sense from an economic standpoint. As Computerworld reports, in the U.K., trading in your old phone to save a few bucks on a newer model is "a more established practice."

MacRumors also notes that "Apple's web-based recycling and trade-in programs have so far been relatively hidden away on the company's site, resulting in low consumer awareness." Kicking off the new initiative with a little fanfare could mean "a significant difference in trade-in usage."

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