APPLE 'may' introduce trade-in/upg program at APPLE STORES

[Acura604]

Reports: Apple will offer trade-ins for a new iPhone - CNN.com


CNN) -- For the first time Apple stores will soon let iPhone owners trade in their old phones for credit toward a new one, according to multiple reports.

According to Apple-centric blog MacRumors, several sources say Apple store employees are currently being trained on the new program, which could go into effect around Apple's September 10 event, when new iPhones are expected to be introduced. That would let iPhone owners exchange their older handsets for an iPhone 5S, or whatever the new phone is called.

In June, Bloomberg quoted unnamed sources saying that Apple was working with recycling company Brightstar and that trade-ins could be refurbished by Apple and resold in emerging markets throughout the world.

It's not clear whether earlier models, such as an iPhone 3 or 3G, would be eligible for trade-ins, although given their limited resale value that seems unlikely.

Apple already has a similar mail-in rebate program. But the convenience of doing so in person, and walking out with a new phone instead of waiting for days or weeks, would be a big upgrade in terms of convenience.

If recent history is any guide, Apple's next iPhone will go on sale in mid- to late September and will likely to be called either the iPhone 6 or iPhone 5S. The company has not made an official announcement, but multiple observers expect Apple to announce the phone September 10 and begin selling it in stores about 10 days later.

The company has released a new iPhone model every year, and the release dates have all been in the summer or fall. The iPhone 5 came out in September 2012, the iPhone 4S in October 2011, and the three versions before that in the summer months.

The company is also rumored to be working on a cheaper version of the iPhone that would be sold in emerging markets. Other reports have speculated on features ranging from a larger, 4.7-inch display screen to a fingerprint scanner to an option to buy a gold iPhone.

[murd0c]

It's about time they are doing this.

[FerrariEnzo]

maybe they are feeling the decline in sales.. haha

[saveth]

I remember when everyone had an iPhone and you would only see the occasional android phone. Its amazing how things changed in just over a year.
Posted via RS Mobile

[LiquidTurbo]

they really need a 4.7" iPhone or larger.

[dinamix]

Apple is the new blackberry. This the beginning of the end for them.lol

[Marshall Placid]

On the business side of things (and the following points are from remembering reading some articles and case studies, etc... might not be 100% exact or correct, but... it's close enough):

1- A main component and a large portion of the cost of an Iphone is the memory chip/memory module (NAND Flash).

The main manufacturer/supplier is... wait for it... Samsung.

So, Samsung is both a supplier and a competitor to Apple.

2- Apple does not manufacture the phones themselves.

They use Foxconn Technology Group (subsidiary of Hon Hai Precision Industry Co., Ltd.) as the manufacturer.

Even the word "manufacturer" is loosely used.

Foxconn buy parts from different suppliers and then assembles them.

Foxconn's gross profit margin is $3 to $5 per phone and sells or transfers this to Apple using the $3 to $5 margin rule.

Granted, Foxconn makes millions of units, so it is highly profitable.

BUT...........

Apple's gross profit margin?

Around $100 to $150 per phone (to the best of my memory... from reading some articles from a while ago).

So... by not being the manufacturer themselves, Apple is leaving a slice of the pie to Foxconn, and parts suppliers (like memory chip makers, camera/CMOS chip makers, LCD glass - Corning in the USA -, lithium-ion battery makers, etc.).

However, this slice of the pie is very small.

Apple, as stated previously, makes $100 to $150 per phone from outright selling the phone and from raking in a portion of the subscription fees charged by the mobile providers (AT&T, etc.).

It's a VERY high gross profit margin in the consumer electronics market.
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TV makers, for example, break-even or even lose money.

Video game console makers? They lose money on each unit sold, and profit from licensing and a portion of video-game sales.
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back to Apple:
But, when competition comes in and reduces your # of units sold, the only way to make MORE money is to take control that last slice of the pie.

3- And, that is what Samsung does.

It supplies its own memory chips and some of the parts in its Android phones.

The memory chip cost is about $7 to $15 depending on the current memory prices of 16GB/32GB chips.

It fluctuates wildly.

This last piece of the pie means that Apple could increase its gross from $100 per phone to $115 per phone.

And... this is only for the memory chip alone.


4- In relation to this article, Apple is trying to increase profits by testing this trade-in process/scheme.

This achieves 3 things:
1-They are reselling it to third-world and emerging countries, so it could be a positive effect on Apple's image.
2-They are removing old Iphones from customers in first-world countries (where a HUGE part of their market is) and opening up an avenue where the old customers can now purchase NEW Iphones, thus increasing Apple sales.
3- After the testing phase is completed, there should be no doubt that it will be successful.

And, Brightstar (the recycling company) will be purchased by Apple.

Conclusion:

Apple is boldly trying new things when they didn't have to, a year, or even 6 months ago.

They are super profitable and very, very cash rich.

They could ideally manufacture many of the parts themselves.
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The only problem with supplying their own memory chips is that a large part of memory chip cost is the raw material/metal which is found mostly in China and countries that does not end in "States".

This is especially true with lithium-ion batteries where 70% of the world's metal supplies (extremely rare minerals/metals) are found in central China (though new deposits are gradually being found in North America).
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But, being a public company, and a technology one at that, shareholders are always clamouring for MORE MORE MORE!

I believe their P/E ratio is around 10, which is very low, due to the lack of new models or products.

The verdict is Apple is trying this new revenue stream first (by increasing sales, not increasing profit margins), at little or no cost before they spend billions on building assembly plants/manufacturing plants in other countries.

[!Yaminashi]

Originally Posted by saveth

I remember when everyone had an iPhone and you would only see the occasional android phone. Its amazing how things changed in just over a year.
Posted via RS Mobile

That's what happens when you release the same thing year after year and call it "revolutionary"

[FerrariEnzo]

and their term "Revolutionary" isnt really so, its something that they should have put in long ago... they are just slowly implementing all these features so they can milk all their "loyal" customers..

[shenmecar]

Originally Posted by saveth

I remember when everyone had an iPhone and you would only see the occasional android phone. Its amazing how things changed in just over a year.
Posted via RS Mobile

its what happens when it takes 7 generations of IOS for customizable keyboards. we android users LOVE our customizable keyboards; which we have had since the dawn of time.