Apple’s recent iPhone 12 event was significant for the smartphone and secondary device market—and not just because Apple launched its first set of 5G devices—but because of the focus Apple placed on trade-ins. In fact, it was the only ancillary offering that was mentioned at any point during the event.
So why was so much focus put on trade-ins during the launch event? And what does it mean for the global smartphone and secondary device markets?
The importance of carrier partnerships
Verizon’s participation in the event was an important move for Apple. It allowed Apple to position 5G as the reason for consumers to upgrade to its latest set of devices, and it’s why our carrier partners and industry analysts are expecting an upgrade super cycle.
Apple’s carrier partnerships have always been integral to its success, and the renewed focus on these partnerships will continue to prove crucial for Apple where upgrades are concerned. During the event, Apple called out promotions it is running with Verizon when trading in an iPhone X, where an iPhone 12 would cost as little as $15 per month. Apple has also partnered with AT&T to offer trade-in promotions, where an iPhone 12 can cost a consumer just $6 per month—both carriers are also offering a $30 discount, waiving activation fees. We are already seeing additional promotions tied to trade-in, such as with T-Mobile, and expect this trend to continue from other carriers and retailers over the coming months.
Additionally, Apple is allowing customers to buy the iPhone 12 directly from its website but is processing trade-ins via its carrier partners, so consumers can get the benefit of the best possible trade-in offers—something it has never done before, and something that will contribute massively to upgrades and the super cycle. Yet another data point that highlights trade-ins as an extremely important tool in the consumer purchase experience of a new device.
This week, on November 6, the iPhone 12 Mini and iPhone 12 Pro Max will be available for pre-order and we expect trade-in to be heavily utilized as consumers upgrade to these models.
Innovations that consumers want
We can’t ignore that the device itself also plays an important role in encouraging upgrades, and Apple’s innovations will delight consumers. In its new devices, Apple has used technology to make its screens more durable; improved charging capabilities and battery life; added a Smart Data mode so that devices can fall back to LTE when 5G coverage is spotty to conserve battery life; launched different sized form factors while maintaining screen size; significantly boosted its camera capabilities to support creatives during the pandemic; and it continues to make its devices and services compatible with one another (for example, the HomePod) for ease of use.
It is these innovations that consumers expect, and Apple has delivered—yet another move that will encourage consumers to upgrade. Apple did all of this with a strong focus on sustainability and commitment to Carbon Neutrality by eliminating redundant accessories and reducing packaging.
But Apple’s innovations aren’t just important for the here and now—they are also important when we consider the secondary device market. For example, Apple is supporting multiple 5G bands in all of its new devices. Which means that when it comes to selling these devices into the secondary market, they will be compatible. The fact that Apple tested the devices on 100 carriers also makes selling devices into the secondary market a lot easier.
The upgrade super cycle and trade-ins
The much-anticipated launch of Apple’s 5G devices is set to give the global smartphone market the boost it needs. With an upgrade super cycle imminent, Apple has positioned trade-ins as a crucial contributor to the success of its new devices. Over 180 million people are estimated to upgrade their iPhones over the next 12 months which will see the secondary device market benefit from Apple’s launch—both from the abundance of 4G devices that will enter the market, and the innovative 5G devices that will make their way into the secondary market in years to come.