How Apple can respond to the refurbished iPhone market

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Apple faces major competition from competing brands such as Samsung, Huawei, and Xiaomi. However, that’s not the only threat to iPhone sales; the strength of Apple’s premium handsets has led to a thriving market for refurbished phones.

Prospective iPhone users are increasingly considering ways to get an iPhone that don’t involve buying it brand new, either outright purchases or getting on contract. More are turning to refurbished iPhones, and this is a big headache for Apple.

While the company may make money on the initial sale of a device, Apple has far less to gain from the sale of refurbished iPhones. But what – if anything – can the company do to respond to the refurbished market?

Why refurbished iPhones have become more popular
The primary reason why refurbished iPhones have become more popular is that they cost a lot less than brand new. By buying refurbished, consumers can get a phone that both looks and works like new but at a fraction of the cost.

Apple itself does sell refurbished iPhones (albeit a small selection of models). However, because of price, it is losing out on sales to seller refurbished retailers. You can click here for a more in-depth definition of what seller refurbished retailers and phones are, but in short, it refers to any refurbished retailer that isn’t Apple itself. The iPhones sold by these retailers don’t include Apple-branded packaging, but they work as expected and cost less than Apple-refurbished iPhones. With price and quality, it’s hard for Apple to compete in the refurbished market or encourage people to buy (even more expensive) brand new devices unless it makes a change.

Why Apple needs to release cheaper iPhones
Apple may be unwilling to drastically slash the prices of existing models or their refurbished counterparts, but many in the mobile industry have called for the company to release a cheaper iPhone. Releasing a more affordable handset would allow the Cupertino, CA. based company to better compete on price, offering users a brand new iPhone as an alternative to all of the affordable, older models sold by refurbished retailers.

Not only this, but it would also allow Apple to make progress in emerging smartphone markets such as India. The average price of a phone in India is less than $200 meaning that Apple, with its $1,000+ flagship models, has struggled to gain traction. A recent report revealed that Apple is not one of top five leading smartphone brands in India, with Samsung, Oppo, Vivo, Micromax, and Xiaomi all doing far better than the US-based brand. Check it out here for the full stats on the Indian smartphone market.

How easier iPhone repairs could change the game
Another way that Apple can dissuade consumers from buying refurbished iPhones is to offer easier iPhone repairs. A broken iPhone is one of the most common reasons why people purchase a replacement – especially a more affordable, second-hand replacement – but by offering easier access to repairs, Apple could stave off this need.

The company has already made some steps on that front. In response to the controversy about the iPhone’s battery life and battery quality, it did begin to offer cheap battery replacement services. However, this article explains that the program came to an end at the end of 2018. For those looking to fix their busted batteries, shelling out a significant amount of money is now the only option. Many cash-strapped consumers will be unwilling to do this, with many just opting to get a different handset which, according to their budget, will likely be refurbished.

Why Apple needs to offer more smartphone innovations
Apple can also find success by doing more of what it’s good at; offering innovations. The technology company is best-known for its ability to push the boat out, and in the past, it has announced some forward-thinking iPhone design ideas. Just check this site out for a rundown of how Apple made the divisive decision to drop the headphone jack from the iPhone 7 and 7 Plus. Although some were skeptical of the new design, it was one that massively paid off the company as not only were the headline-making phones a success, but it also helped to drive a large increase in wireless headphone sales.

By releasing phones with innovations, Apple will give people a greater incentive to purchase the iPhone on day one, instead of waiting for a refurbished model. The refurbished market tends to have new iPhones around three months after the release date, but if the innovation is interesting enough, plenty will want to get the phone at launch instead of waiting a little longer for the refurbished model. It would also give shoppers a reason to buy a more up to date phone rather than a slightly older refurbished model.

Apple is still shifting millions of brand new iPhones each year, but it’s hard to deny that refurbished iPhones are a major thorn in the company’s side. If it wants to ensure that refurbished retailers don’t gobble up a good chunk of its business, it will have to take action sooner rather than later.

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About the Author: Gunnar Andreassen

Gunnar Andreassen is a writer, editor and journalist. And a huge Apple fan! Featured on ABC, CBS, NBC and FOX.