iPhone 4 and 4S owners are in a seller’s market. Carriers and retailers are offering customers the new iPhone 5 for little or no cost in exchange for an iPhone 4 or 4S. Now even Apple itself is reportedly preparing an in-store trade-in program.
The iPhone 4 is a big deal in the biggest market for smartphones: China. One of ever four mobile phones sold worldwide during the first quarter was sold in China, according to Gartner. Of the roughly 57 million mobile phones that Chinese customers bought during Q1, almost 7 million were iPhones.
According to IDC, iPHone 4 sales grew 211% in China during Q1, and the iPhone is now the fifth most popular phone in China with a 9% total market share. China Telecom and China Unicom both carry the iPhone, but the world’s largest carrier, China Mobile, still does not have a deal with Apple. Apple does not support China Mobile’s 3G (TD-SCDMA) network, but the carrier says that 15 million of its customers want the device so badly that they’re using it on China Mobile’s 2G network.
Ironically, while Chinese consumers rush to buy iPhones, the Chinese companies that make them may be experiencing a slowdown in orders. Demand for used iPhones is robust, but the outlook for the newest model is less clear. “Apple is faced with the challenge of being increasingly dependent on the replacement market as its addressable market is capped,” said Gartner analyst Anshui Gupta.
But in China, Apple’s addressable market is growing. And for Chinese consumers. And by selling upgrades to existing customers, Apple can reclaim older models and repurpose them overseas. In China, an iPHone 4S has almost all the advanatages of in iPhone 5, since LTE is not available in most of the country.
Third party distributors like <a href="Brightstar” target=”_blank”>Brightstar wipe the data from the used phones and work with distributors and carriers on the ground in the destination markets. They also assume some inventory risk, so if sales are not as strong as expected, the carrier or retailer who takes possession of the used phones is not left with a large stockpile.
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