Apple Nudges U.S. iPhone 4S Users to 'Recycle'
Apple emailed iPhone 4S users May 8 to tell them, "It's a beautiful time for an upgrade."
Users who "step up" to an iPhone 5S or 5C could receive a $199 credit when they "recycle" their current iPhone, Apple explained. Customers can also recycle their old iPhones by mailing them in, in exchange for an Apple Store Gift Card.
While the term "recycle" may make Apple sound wonderfully green (and certainly that's an agenda for the company), Apple perhaps more likely meant that the phones will be recycled on to a new group of users.
Less than four months after relaunching the iPhone 4 in India, Apple announced plans to stop selling the phone, the Times of India reported May 7.
"It will now pull out the product from all markets, one of its trade partners said," the report continued. "Another partner said the iPhone 4 had served its purpose in India: it had doubled the consumer base of iPhones to more than 25 lakh [2.5 million] people in one year. And, iPhone users generally being brand loyal, it's unlikely that these users will migrate to any other brand."
And likely, then, that they'll migrate to the iPhone 4S, Apple's now lowest-priced, entry-level phone.
"Apple has identified a good business model that allows them to resell the same phone twice, and in the process expand their share in emerging markets where their newest models are too expensive for most consumers," said Ken Hyers, a senior analyst with Strategy Analytics. "It's a really smart strategy, and one that Apple, whose smartphones are aspirational products in emerging markets, is uniquely positioned to capitalize on."
Hyers likened the deal to Porsche reselling vehicles as certified pre-owned models after they're returned from their original leasers.
"Only the top luxury brands can profitably pull this business model off on a consistent basis, and Apple is certainly the luxury brand of the smartphone market," Hyers added.
Ezra Gottheil, a principal analyst with Technology Business Research, says he expects Apple is preparing to include "previously owned" iPhones that are reconditioned with new batteries and new (or resurfaced) screens.
"The iPhone 4 was very successful in India, but there have been reports of disappointing performance with new versions of iOS. Also it is possible that Apple is planning to introduce the Hindi language for Siri, and the iPhone 4 does not support Siri, while the 4S does," Gottheil told eWEEK.
"The other reason for Apple's drive for upgrades of earlier versions," he added, "is that iPhone sales have undoubtedly begun to slump in anticipation of the iPhone 6 later this year."