Faced with a problem that users were not wasting shedloads of cash upgrading their iPhones, Apple came up with an idea of creating a scheme where they would trade up their new ones everytime a new one appears. WIth this plan in play, the user sells their soul to Apple who collects a regular subscription. Apple then flogs the old phone for a reasonable price, normally in the third world where they cannot afford to buy a new one.
Now It seems Apple's rival Samsung is going to run a similar programme. The key to the difference is how big a discount the refurbished phones would be sold at, which markets the phones would be sold in or how many refurbished devices Samsung could sell. The price difference for Apple phones is not that great so Samsungcan make its deal more attractive and clean up.
The Samsung phones are likely to be fitted with parts such as a new casing or battery.
A refurbish iPhone has a re-sale value of around 69 percent of its original price after about one year from launch, while Samsung's flagship Galaxy sells for 51 percent of the original price in the US..
Selling used phones could help Samsung fend off lower-cost Chinese rivals that have been eating into its market share, and free up some capital to invest elsewhere or boost marketing expenditure.
Deloitte says the used smartphone market will be worth more than $17 billion this year, with 120 million devices sold or traded in to manufacturers or carriers - around 8 percent of total smartphone sales. Some market experts expect the used market to grow fast as there are fewer technology breakthroughs.
"Some consumers may prefer to buy refurbished, used premium models in lieu of new budget brands, possibly cannibalizing sales of new devices from those budget manufacturers," Deloitte said in a report.
The risk of offering refurbished devices is that they could potentially cannibalize sales of Samsung's other mid-tier devices.