Last week’s iPhone 6 announcement gave people a lot to talk about – from the Tim Cook and Bono point thing to the guy with the purple scarf…and of course, there’s the new phone. Consumers are anxious to get their hands on the newest device from Apple, and our ecoATM kiosks have seen a substantial increase in activity in the last week.
Our data experts pulled the numbers to put together a heat map highlighting regions we’ve seen the highest increase in activity at our kiosks – looking at price checks and buybacks of previous generation iPhones. We know the lines are already forming at retailers across the country, and we are anxious to hear sales figures from Apple after the highly awaited phones hit the shelves tomorrow.
What feature on the iPhone 6 or iPhone 6 Plus are you most looking forward to? Tell us in the comments below!
With the actual sale launch (meaning the date it hits the shelves) of the iPhone® 6 this week, I thought it was important to discuss recycling your phones and maximizing the green. Not just the environment green to save our landfills from including precious metals but also your wallet! My buddies and Green Living Guy sponsor at ecoATM® has got over 1,100 nationwide automated electronics…
By Kate Pearce
(This post was originally published on Bamboo Mobile)
The new iPhone 6 models, which will be shipping on September 19th, could generate as many as 12 million sales, globally, the first weekend it launches. For the US market, this could be as many as six million in sales that weekend. Yes, September is turning out to be a big month for the wireless industry, but let’s not overlook the recommerce and eco-focused guys like ecoATM and Gazelle who hope to recapture used iPhones/smartphones and keep them out of landfills (and desk drawers) as customers are rapidly upgrading. The new iPhone hoopla could also generate new additions via early upgrade programs, which were launched by the national carriers last summer. Here we take a closer look at these early upgrade/installment programs in preparation for the new iPhones hitting the market soon.
The wireless industry has changed quite a bit since the launch of the first iPhone in 2007. The upgrade cycle has shifted as more customers want newer, fancier smartphones more often. A survey we conducted in June found that about 48% of respondents said they upgrade to a new phone every 24 months or less; 26% said they upgrade every 18 months or less. With new devices entering the market and consumers eager to purchase them, carriers have moved away from the practice of requiring a customer to sign a two year-contract (and subsidizing the phone). After all, subsidies were first implemented to help the wireless industry take off. Mission accomplished. Now, we have the carriers (boldly led by T-Mobile) rolling out no contract pricing plans and early upgrade/device installment programs which has dramatically changed the industry.
Early upgrade programs
When first launched last summer, early upgrade or device leasing programs (also known as installment plans) were scrutinized by some industry pundits who said they were not a good value and too complicated for the consumer to understand. Analysts at The Verge said carriers were trying to capitalize on the customers’ constant desire for new gadgetry; even going as far as saying that subsidies costs were built in to the installment plan pricing model even though the customer was paying for the phone themselves. Moreover, they asserted that the longer the customer would pay on the installment plan, the more profitable it was for the carrier. Not to mention that the consumer is now missing out on getting the most value for their used smartphone since they are required to trade them in with these programs. Here is an excerpt from the article:
“If you want to get really mad, just keep the math going to 24 months, at which point you’ll have paid $650 in Edge payments for the phone and Verizon will have collected $480 of device subsidies built into your plan. Compare that to Verizon’s standard two year contract, which would have cost you just $199 up-front and then nothing additional monthly: the built-in plan subsidy would have paid off the phone in the background, and you would simply walk away with the phone in hand. It is the clearest proof that Edge is designed to keep Verizon’s prices high while making you pay for phones more directly.”
Since then, the carriers have updated and tweaked these programs based on this earlier feedback, including better pricing plans associated with the programs. Sprint even launched an iPhone for Life leasing program, allowing customers to pay $20 a month for 24 months on their iPhones for two years, in which they can turn in the device for a new iPhone. The following table provides an overview of the other traditional early upgrade programs:
Source: Compass Intelligence, 2014
Most of these programs require a credit check if you are a new customer and carriers like Verizon initially rolled out their Edge program only to their highest credit class customers. And, as mentioned, all of the programs require the customer to trade-in the original smartphone purchased when signing up. The device must be at least in working condition and, for some carriers like T-Mobile, must pass a three-point inspection.
Since these early upgrade plans have been in the market for one year now, we have posed some questions to our survey panel over the last few months about them. Here are some insights:
Earlier in the year, 53% of our survey respondents told us they are NOT interested in early upgrade programs because they keep their phones as long as they can. In our most recent survey, that number decreased to 44%, implying that more people are showing interest in these programs.
However, when we asked about the requirement to turn their old phones back in if they are on a program; less people were inclined to want to do so than at the first of this year.
Source: Compass Intelligence, 2014
In our latest survey, about 25% of mobile users told us that they upgrade their phones, in general, because their old device was not working. Interesting since most of the early upgrade programs require the device to be in working condition. And, if it is not, the customer is responsible for repairing the device unless they sign up for the insurance program (and they still need to pay the deductible). At least with T-Mobile’s Jump program the insurance plan is included.
Conversely, what if you just bought a brand new Samsung Galaxy S5 on an early upgrade plan but now really want to try the iPhone 6? On the Verizon Edge Up plan, the customer can upgrade after 30 days if the device is 60% paid off. This is interesting from a recommerce perspective since the carriers may end up collecting smartphones in pristine condition with high resale value. And, in many cases, will not be offering any additional incentive to the customer for their gently-used device. This looks like another plus for the carrier, yet not so much the consumer.
So are the carriers signing up customers on these plans? In Q2 2014, AT&T reported that it has signed up seven million Next customers; AT&T is bullish on this program and sees additional growth via Next. Unlike some in the industry who predicted that customers would leave after the initial installment plan was up, AT&T is seeing more customers stay due to the impact of Next. Verizon did not report specific numbers but said it had an 18% take rate on Edge in the quarter, which is considerably lower than AT&T.
Apple will start shipping the new devices soon and the carriers have already started to tweak their early upgrade and trade-in programs with promotions and additional marketing in this area. They really want customers to embrace and adopt these plans to increase their gross additions and improve profit margins. As a way to combat these plans, it might be helpful for the standalone recommerce players to adopt some sales strategies that expose some of these shortcomings and to focus on those mobile users who are not tied to an early upgrade program and who find less value in doing so.
About the Author
Kate Pearce is a Senior Strategist and Consultant at Compass Intelligence where she manages consulting projects, conducts market research and develops content for Reuse and Recycling, Green Wireless, Mobility/Devices, and other Compass Intelligence markets. She is also involved in other specialized business and client development activities for the company.
Pearce is also the Editor-in-Chief of Bamboo Mobile (www.bamboo-mobile.com), an information hub designed as a resource for news and insight about mobile device reuse and recycling. Bamboo Mobile promotes device reuse and recycling as well as other sustainability efforts going on in the mobile industry. She has been quoted in major news and technology publications, including CBS News, New York Times, CNET, St. Louis Post Dispatch and Business Week.
She holds a Bachelor of Arts degree from the University of Missouri-Columbia and currently resides in Kansas City area. You can contact Kate at firstname.lastname@example.org.
For more information, please visit our Reuse and Recycling research track on the Compass Intelligence website.
Editors Note: To celebrate the release of the iPhone 6, we updated previous content to provide you with the most relevant information.
Your private information is extremely important, and you should make sure that it’s safe and secure with you before your device is recycled or sold. There are many different phones out there and many different ways to erase your information, but here are directions for a few of the most popular models out there:
1) iPhone 4 up to the iPhone 5S
2) Samsung Galaxy S4
Also important to note: Remove any memory or SIM cards from the device before selling it to guarantee that your photos and videos remain in your care. Please note that if you forget, ecoATM will responsibly recycle these components as well, along with cases, cables and other miscellaneous chargers you’d like to give us.
Have other questions about erasing information? Talk to our Customer Service team, and they’ll be happy to help. Click here for more information on Apple devices, and here for more on the Samsung Galaxy S4.
Just about a year ago, Apple released its newest operating system, iOS 7, on September 18, 2013. To put it simply, our beloved green machines turned red (well, not really, but that would be kind of cool). The kiosks were suddenly having trouble analyzing iOS 7 devices, and this same frustrated reaction was felt across the recycling and buyback industries.
The confusion was short-lived; with the help of our engineering team, and a little assistance from you, these challenges can be avoided. If the device you’d like to recycle is running iOS 7, follow these simple steps BEFORE you visit to get the best experience at ecoATM:
That’s it! Happy customers, happy machines. Don’t forget to check back here once iOS 8 is announced to prepare yourself on best practices for recycling devices running that software.
For more on iOS 7, visit Apple.com.