Tag: Apple stores

There’s gold in the used smartphone market

threeiphonesWith millions of smartphones sold each week, the market is quickly becoming saturated and upgrade cycles are likely to slow down, but while this might be bad news for phone makers and carriers, some outfits will cash in on second-hand phones.

According to research firm Sanford C. Bernstein, the global trade in used smartphones might be the next big thing.

“Our analysis suggests that the used smartphone market is poised to explode – we estimate that the market will grow from 53 million to 257 million units over the next 5 years,” said Toni Sacconaghi of Sanford C. Bernstein. “By 2018, we estimate that used phones will cannibalise eight percent of total new smartphone sales, up from three percent in 2012.”

The percentages don’t sound very impressive, but the unit volume does. At the moment, most used phones are collected in the US and sold in emerging markets. Apple’s iPhones are particularly hot and there is plenty of demand in emerging markets, as many customers simply can’t afford new iPhones – and even older models are status symbols in less affluent markets.

Sacconaghi found that iPhones see a lot less depreciation than Samsung’s Galaxy S series phones. Even broken iPhones are selling, which isn’t the case with other brands. Carriers are also joining the fun and they are offering trade-in programmes that actually pay more for phones locked to a competitor’s network. In some cases, US carriers are willing to pay twice as much to get their hands on a phone locked to a competitor’s network.

Piper Jaffray analyst and Apple guru Gene Munster also concluded that iPhones have better resale values that Galaxy phones.

Apple’s build quality is second to none, so most iPhones stand up to punishment better than plasticky Samsungs. Brand snobbery is another factor, but Samsung has some trump cards as well. Galaxies have an easily replacable back cover and a user-replacable battery, which is not the case with iPhones.

Apple is reportedly mulling a trade-in programme of its own, through its stores, reports Forbes.

Apple retail revenue is $58 per customer

iPad-miniApple has been in the news for all the wrong reasons lately. Its falling share price has been a source of concern for Wall Street, the lack of revolutionary products is another, and a big gap in the update cycle is yet another. However, Apple’s retail operations are going from strength to strength.

In fact, the average Apple consumer who happens to walk into a retail store nets the company $57.6, twice as much as shoppers who enter Tiffany shops, minus those who ask for breakfast. According to Apple’s latest financials, retail numbers are still going strong, reports Hot Hardware.

The number of average visitors per store was about 250,000 per quarter, up from 170,000 in the same period three years ago. It is worth noting that the iPad launched three years ago, which should explain the sudden spike in numbers. However, the iPad mini was introduced last year and it does not seem to have had much of a negative impact on retail spending, despite the fact that it is significantly cheaper than the full size iPad.

In addition to the second generation iPad mini with a high resolution display, Apple is widely expected to introduce a cheaper version of the iPhone later this year. Although it is supposed to be designed with emerging markets in mind, a cheaper iPhone could also cannibalize sales of the flagship iPhone in developed markets. The exact same trend was observed in the quarters following the iPad mini launch.

With that in mind, the average Apple retail consumer might start to spend a bit less, as more and more of them are likely to opt for the iPad mini and cheaper iPhone over their bigger and pricier siblings.