Apple planning to introduce iPhone trade-ins

iphone5-front-backBloomberg is reporting that Apple’s planning to introduce an iPhone trade-in program for the first time ever since the device was introduced. It is doing so in an attempt to encourage current customers to upgrade to new iPhones, and hence benefit from the additional sales.

Bloomberg reports:

Apple Inc. is starting an iPhone trade-in program this month aimed at getting users to upgrade to the iPhone 5 and turn in older models, people with knowledge of the plans said.

Apple has teamed up with Brightstar Corp., a mobile-phone distributor, to run the exchange program, said the people, who asked not to be identified because Apple hasn’t publicly announced the plan.

Bloomberg’s claim about the trade-in program being the first ever by Apple isn’t entirely accurate since the company already has an online recycling program in place. It is however the first trade-in program to be offered at Apple’s retail stores.

We’re assuming that the program will offer an Apple Store gift card for the value of the device, just like the recycling program. By offering Apple Store gift cards, Apple has the advantage of generating incremental revenues as it forces customers to buy their products.

There are a number of companies like Gazelle and NextWorth that specialise in buying used or damaged iPhones in return for cash, which they later sell overseas at profit. We’ll have to see if Apple competes with these services on resale price.