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Apple’s iPhone trade in program is a game changer

Once again Apple defines new business model

As reported in Techcrunch two days ago, Apple has already started piloting their new trade in program for iPhones ahead of the release of the new iPhone 5s model.  While this may not seem like a big deal to you right now, I think with hindsight this will be another case of Apple inventing a new lucrative market that they will at least initially own for itself.

When you think about it, that is really Apple's secret sauce. Yes they design beautiful products that are simple to use. But what they have done with one product after the next is define a new, profitable market.  They practically invented the digital music player space with iPod, redefined cell phones as mobile communication platforms with iPhone and brought the tablet to life with iPad.  I believe they are going to fundamentally change the way we buy phones with this program.  The same way there are both new and used car dealers for autos, we are going to see a thriving used/refurbed phone market for phones.

These used phones will be set free from the binds that tie them to particular carriers. Perhaps there will be a big enough market where you can buy a phone pre-set up for a particular carrier. A new section in your iTunes store will be a phone.

Many of the carriers are starting to offer new programs where you can upgrade at any time you like at lower upgrade prices. As this model becomes more widespread, it will also leave phones that are not very old, but have been tossed aside available.

Think about it, what do you do with your old phones now? If you are like me you buy a new phone when a new model comes out that you like and you are eligible for upgrade, rather than when your old phone craps out.  What do you do with your old phone?  Do you sell it on ebay? I know some people who do.  Do you give it to your kid or someone else? I do that. Or do you toss it aside and save it to use in a "phone emergency". I know some folks who like having a spare around.

But what about if you had an easy way and means to trade it in. You could get cash for it or credit towards a new phone or some other tech gear?  That would be very enticing indeed.  This is exactly what Apple is doing. On top of this though, they have the distribution through iTunes to resell these phones as well.  That is a key piece of this.  You could buy all of the used phones you want, but if you don't have a way of flipping them, what would you do with them.

It won't be long until we see other phone trade in programs popping up.  I am sure we will see generic used phone traders becoming very common place.  Consumers and even businesses will soon have the choice of buying new phones or late model used phones that will be much cheaper and come with warranties and so forth.

I know that many carriers including AT&T already have been offering refurbed phones for some time.   But just as Apple did not really invent the digital music player, the smartphone or the tablet computer, they will not have invented used phone trade in and refurb sale, but they will be the ones who bring it to the masses as an art form

Mark this day, Apple has just invented its latest market. Buying and selling phones may never be the same.

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