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Apple Starting IPhone Trade-In Program

Apple Starting IPhone Trade-In Program

Apple is reportedly partnering with well known mobile-phone distributor Brightstar to implement an in-store iPhone exchange program later this month. Brightstar also works with AT&T and T-Mobile handling their iPhone exchange programs as refurbished iPhone 4 and 4S demand increases in emerging markets like China.

Brightstar acquires roughly 80 percent of its used devices in the U.S. which are then resold through distribution centers in 50 countries. The iPhone is still seen as a premium brand around the world. By offering older iPhone models outside the U.S. it limits domestic iPhone cannibalization while allowing less affluent markets to purchase a well known brand.

Apple's growth has slowed significantly and exchange programs are a common mechanism to drive sales of newer phone models. Apple sold 37.4 million iPhones in its latest quarter, compared with 35.1 million a year ago. The share price of Apple stock has declined 38 percent from $705 in September to $440 as of today. Many believe the company's era of rapid growth may be over.

It doesn't help that Samsung phones using Google's Android operating system recently overtook the iPhone to became the best-selling smartphone brand in the U.S. By offering a trade-in program, Apple can target existing iPhone customers to purchase an iPhone 5 while minimizing their out-of-pocket expense. "AT&T is currently paying as much as $200 for working iPhone 4s and 4Ss, which could let some customers buy an entry-level iPhone 5 for no money down," reports Bloomberg.

The trade-in program has yet to be officially announced. Apple spokeswoman Amy Bessette and Brightstar spokesman Patrick Foarde, who works for Ketchum Inc., both declined to comment when questioned by Bloomberg. The announcement is expected to take place June 10 during Apple's annual developer conference in San Francisco alongside word of a new music-streaming service.

Image by: Bjorn Olsson