Apple Takes a Page Out of T-Mobile's iPhone Playbook

The "Un-carrier" is going all out with an aggressive marketing campaign, targeting iPhone users on other networks. T-Mobile is now accepting trade-ins for older iPhone models, which can help offset the down payment on a new iPhone 5 on its network. It turns out Apple (NASDAQ: AAPL  ) is now doing the same thing.

Sorry, prospective U.S. upgraders. This deal isn't for you. We're talking about Indian consumers that now have the option to trade in any smartphone through an Apple reseller to help offset the cost of a new iPhone, according to a recent report from The Times of India. It's the latest is a string of initiatives that Apple is pursuing in the world's second-largest country by population to boost sales.

It's the first time that Apple's ever offered such a program that targets competing products. The Mac maker has long had a recycling program primarily for its own gear, issuing gift cards for Apple products on their deathbeds. Apple will accept old products made by other manufacturers, but simply recycles them without offering any credit.

Since Indian consumers are price sensitive in the absence of carrier subsidies, Apple has been pushing its iPhone 4 more aggressively, since that's the most affordable model it has. The device, originally launched in 2010, still retails for $485, but a trade-in brings that price down to $360 or less, depending on the value of the trade-in.

The minimum trade-in value is approximately $125, with a little over $90 of that being reimbursed to resellers from Apple distributors. That money has to be coming from somewhere, likely in the form of kickbacks from Apple.

Naturally, Samsung has responded by copying the tactic. The South Korean company now offers a similar trade-in program, defending its dominant status in the Indian market.

The mid-range $220 to $400 price segment offers respectable volumes that Apple hopes it can tap with the iPhone 4. However, the low-end segment is putting up the most impressive growth, which local players like Karbonn and Micromax are riding to riches.

Still, early signs indicate the program is working, with iPhone sales tripling a week after it was implemented. A local retail exec is quoted as saying that Apple has never targeted the Indian smartphone market as it is now.

Just wait and see how the rumored affordable iPhone fares in India.

There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.


Read/Post Comments (2) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 12, 2013, at 9:40 PM, mdl00 wrote:

    "Naturally Samdung has responded by copying the tactic"

    ...

    What does Samdung NOT copy? They'll probably offer iPhone trade-ins and then examine them to see what technology they can steal.

  • Report this Comment On April 12, 2013, at 10:14 PM, Reelsyrius wrote:

    I also am not a fan of Samsung copying this, however the fact is that Samsung is still a major supplier of practically all the major components of iPhones (display, processor, etc) and their manufacturing processes are top notch which is why Apple still works with them. Samsung doesn't need to take apart anyone's phone to steal the stuff, they just walk out to their engineers desks and have them move to another department to work on Samsung gear ;)

    Very interesting tactic though.. Perhaps if sales slow in the US and more carriers drop their subsidies we might see this come to the states.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2361222, ~/Articles/ArticleHandler.aspx, 10/24/2014 7:13:10 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement