Chinese iPhone and iPad trade-in program encounters weak public reception

Posted:
in iPhone edited April 2015
Apple's just-launched Chinese iPhone and iPad trade-in program is already meeting with a tepid response in the country, particularly in light of the prices of new devices and higher trade-in values at third-party recycling companies.




On Wednesday, ZDNet cited the example of a Shanghai woman interviewed by Sina, who said she was "stunned" to learn that she could only get 250 yuan, or $40, for an iPhone 4. The company is also offering a maximum of 500 yuan ($80) for an iPhone 4S, or 1,500 yuan ($240) for an iPhone 5s.

Those values are minuscule next to what some third parties are offering for the same hardware. Sina noted that even a 16 GB iPhone 4S will often fetch 1,100 yuan ($176), while a 16 GB iPhone 5s is worth about 2,900 yuan ($463). Some of the people interviewed by the agency said they would prefer to sell to these alternative shops, especially since they pay in cash, whereas Apple is only offering store credit.

China is one of the most expensive places in the world to buy an iPhone, even when considering that devices are sold contract-free there. A 16 GB iPhone 5s for example is 4,488 yuan, or $718. In the US, the same model is $549 unlocked. An iPhone 6 Plus is well out of the general public's price range, costing at least 6,088 yuan ($973).

Although the claim hasn't been confirmed, Bloomberg has previously said that Foxconn is participating in the Apple trade-in program by repairing and reselling devices. The program is presumably generating profits for both companies, although Apple Store workers reportedly said that the company's main incentive is protecting the environment.

Comments

  • Reply 1 of 11
    radarthekatradarthekat Posts: 2,899moderator

    I think it's awesome that there already exists a robust trade-in network in China that provides much higher prices than what Apple/Foxconn are offering.  Likely the Apple trade-in program will capture iPhones and iPads that have been damaged, as those would be less likely to draw the higher prices through the 3rd-party trade-in channels.  So let Apple/Foxconn take back the shattered displays, water-damage, and otherwise wrecked iPhones and iPads, repair those and get them back into circulation.  And let the others recirculate the ones that are in decent working order.  In the end, more iPhones and iPads in use means more app and media sales and fewer people walking around using Android crap.  Everybody wins.  Well, everybody who counts.

  • Reply 2 of 11
    freerangefreerange Posts: 1,584member
    The article's iPhone retail price comparison between China and the U.S. is grossly misleading. Apple's quoted retail prices in China already have added in the 17% government mandated tax in their retail pricing for all their products. (This is why many people go to Hong Kong to purchase Apple products where there is no sales tax.) Factoring this in, there is only a $50 difference between Apple's actual China and US pricing for the base model.
  • Reply 3 of 11
    rogifanrogifan Posts: 10,669member
    Why on earth would AI post anything from ZDNet? One of the most Apple hating tech sites out there. And totally in the back pocket of Microsoft.
  • Reply 4 of 11
    konqerrorkonqerror Posts: 685member
    Quote:

    Originally Posted by FreeRange View Post



    The article's iPhone retail price comparison between China and the U.S. is grossly misleading.

     

    The article never said that Apple jacks up the price of the iPhone in China. Read carefully. It says that China is the most expensive place to buy an iPhone, which doesn't contradict anything you said.

  • Reply 5 of 11
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by FreeRange View Post



    The article's iPhone retail price comparison between China and the U.S. is grossly misleading. Apple's quoted retail prices in China already have added in the 17% government mandated tax in their retail pricing for all their products. (This is why many people go to Hong Kong to purchase Apple products where there is no sales tax.) Factoring this in, there is only a $50 difference between Apple's actual China and US pricing for the base model.



    We have 23% Vat in Ireland and a iPhone 5S 16GB is still $89 cheaper here than that quoted price in China.  Import tax?

  • Reply 6 of 11
    MarvinMarvin Posts: 14,195moderator
    I think this is something Apple should get in on worldwide. They can say that if your hardware is under 3 years old, they will offer trade-in value on it towards a new device. This would encourage people to keep upgrading and avoid the hassle of resale. They could make a lot of money reselling older hardware and they can get away with a 1 year warranty on the refurbs they put out with no option to extend warranty. If they offer 70% of what the hardware is worth at resale (depending on condition), they can mark them back up to resale value.

    So say someone bought a 15" Retina Macbook Pro in 2012 for $2k and it's worth $1200, Apple would offer $840 towards the cost of a new device. They'd then refurbish the old one and sell it for $1200 and they can still offer free delivery so net profit would be about 27% and they'd appeal to a wider audience because of the lower prices on the refurb units. They shouldn't lose too many new sales because new sales happen with the trade-in, they're essentially just taking profit that would otherwise go to places like eBay and Craigslist.

    People would still sell on 3rd party sites for the best price but after you take off about 15% fees, even if they managed to get $1200, the difference between their price and Apple's is $180 (17%). For the convenience of just walking into a store and walking out with a new machine, I could see people giving up the $180. They can even offer to migrate the old one over for them for an added fee and ask them to check everything is ok.

    They don't like to keep inventory lying around but they can have a dedicated hub in each country so that they aren't cluttering the retail stores with old hardware. People could then order online from home or do an online order in the retail store where they can buy accessories. They sell 20m Macs per year so 3 year's worth of hardware would be 60m units. They won't all upgrade via Apple and some won't at all but say they buy up 15m units at an average price of $500 ($7.5b total in one year - most units will be Airs etc) and sell these, they'd make about $2.8b net extra per year and grow Mac unit volume by just under double.
  • Reply 7 of 11
    freerangefreerange Posts: 1,584member
    konqerror wrote: »
    The article never said that Apple jacks up the price of the iPhone in China. Read carefully. It says that China is the most expensive place to buy an iPhone, which doesn't contradict anything you said.

    Read carefully. My point was the comparison was wrong and misleading. Either take the tax off both prices, or add to both, if you plan to call out specific price points. The U.S. number is without any tax, and the Chinese price includes a 17% luxury goods tax. The way the disparity in numbers is indicated in the article are wrong as it makes it look like Apple is gouging and that is not the case. Further, the article focuses on how much Apple is paying for used iPhones, compared to what consumers paid to Apple, and the price listed is not the right number as17% went to the government. It is sloppy and inaccurate reporting.
  • Reply 8 of 11
    jbdragonjbdragon Posts: 1,935member

    If you can get more for you're used device someplace else, why wouldn't you?  I got $202 from T-Mobile this last October for my 4+ year old iPhone 4.  yes 4, NOT 4S.  That was after I already had my iPhone 6 from them for about a month before they offered these trade in deals which I was able to apply for.   I would have been lucky to get $50 from it anywhere else.  A little effort can pay off.   The Chinese aren't dummies.

  • Reply 9 of 11
    There is no luxury goods tax applied to iPhones sold in the states, so there's nothing to apply or subtract to the US price.
  • Reply 10 of 11
    Quote:

    Originally Posted by Rogifan View Post



    Why on earth would AI post anything from ZDNet? One of the most Apple hating tech sites out there. And totally in the back pocket of Microsoft.

     

    Spot on.

     

    Wasn't Bott cited as a reference just last week?  I can't remember if it was AI itself, or a forum post; but all I could do was shake my head.

  • Reply 11 of 11
    konqerrorkonqerror Posts: 685member
    Quote:

    Originally Posted by FreeRange View Post





    Read carefully. My point was the comparison was wrong and misleading. Either take the tax off both prices, or add to both, if you plan to call out specific price points. 

     

    You still miss the point completely. Can I buy a iPhone without tax in China? That would be illegal, so no. The out-the-door price in China is the highest in the world.

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