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Apple to kick off in-store iPhone trade-in deals to spur sales

Gregg Keizer | June 10, 2013
Current buy-back vendors like Gazelle and NextWorth not worried, see the move as a 'float-all-boats' opportunity.

And on the demand side, there's no sign of flagging interest in the iPhone, or at least a cheaper one, in Asia, Africa and South America. "The shift from feature phones to smartphones is massive," Ganot said, "and it clearly is not going to be met by production. That said, as people migrate from feature phones to smartphones, Apple wants their first smartphone to be an iPhone, because once you own one, you're in the ecosystem and you're more likely to stay loyal to it."

Both Ganot and believe their business is secure from any Apple decision to enter the market. "We're an online player," noted Ganot. "A quarter of all consumers buy their iPhones online, and at product release time, the number goes up to over 30%. The likelihood of those people bringing their [older] phones to a store, waiting in line, is low. So we're in a good position."

However, Gazelle may have trouble competing with Apple on price. Apple's current online-only buy-back program, which may hint at how much the company would hand over in credit for an in-store exchange, will pay $221 for an AT&T 16GB iPhone 4S, while Gazelle shows a buy-back of between $205 and $215 for the same phone.

NextWorth, another iPhone buyer, will pay $219 for that phone, and, which takes a 10% commission, suggests that sellers list the AT&T 16GB iPhone 4S at $269 on its sellers-meet-buyers board.

Even so, Ganot is optimistic about Gazelle's chances as Apple steps into the business.

"There's an insatiable demand for the iPhone in [developing] markets, like Asia, Africa and Latin America, which still don't have a lower-priced iPhone," Ganot said. "[True] the competition is very dynamic, but an increase in size [of the buy-back market] will float all boats, including our boat."

Apple already runs a trade-in program, but it's online only. It pays top dollar: $221 for the same iPhone 4S that Gazelle, for instance, pays $205-$215.


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