Trade-in program expected to give boost to iPhone sales

Customers examine Apple Inc products at a store in Xuchang, Henan province. China is a major part of Apple's growth plans. (GENG GUOQING/FOR CHINA DAILY)

Apple Inc is planning to introduce a trade-in program for the iPhones in China after a similar program bolstered sales in the United States.

Consumers will be able to take older models to Apple stores for credit against the company's products as soon as March 31, according to a Bloomberg report on Thursday, quoting people familiar with the effort.

The company is partnering with Foxconn Technology Group on the plan, one of the people said. Apple China declined to comment when contacted by China Daily on Thursday.

China is a key part of Apple's growth plans, with demand for larger-screen iPhones fueling a record profit of $18 billion during the final three months of 2014.

A January report from research firm Canalys said that the popularity of the iPhone 6 and 6 Plus in China in the fourth quarter of 2014 has allowed Apple to become the largest handset vendor in the Chinese smartphone market for the first time.

The China trade-in plan follows an expansion of a similar program started in 2013 in the US, where the company is also accepting non-Apple devices.

The China program is likely to involve only Apple phones, said the Bloomberg report, with retail staff at its outlets assessing an iPhone's condition before offering store credit for those originally bought in China.

Foxconn will buy the phones directly and repair the devices if needed, then sell them through its e-commerce sites and through physical stores too. Foxconn declined to comment.

A staff member at an Apple outlet in Beijing, who declined to be named, said on Thursday that he had not heard of the trade-in program and that any official announcement would likely be made through the company's website. He thought the aim of the trade-in program in the US is for environmental protection.

"The credit for older phones needs to be used to buy iPhones only," he said.

About half the people buying iPhones in the US during the final quarter of 2014 traded in their older phones, according to Roger Entner, an analyst with Recon Analytics LLC.

James Yan, an analyst at International Data Corp, a global market intelligence firm, said the program is certainly good news for potential sales of iPhones in China.

"But I don't think people will consider trading in their older phones for new phones unless they can get credit of more than 500 yuan ($80.6)," he said.

The lifecycle of older iPhones has raised some concerns among consumers.

Liu Chang, a 24-year-old programmer, said she would be interested in such a trade-in program.

"I will not buy an iPhone 6 unless my half-year-old iPhone 5 can be valued at least 1,000 yuan," she said, adding she would be worried too that the program could lead to an increase of recycled components in new iPhones in the future.