Apple's iPhone trade-in program in China could boost sales

Apple has quietly launched a trade-in program to let Chinese customers exchange their old iPhones and iPads for the latest devices, which could help promote adoption of its upcoming Apple Pay and Apple Watch.

The trade-in program has already been available in the U.S., but Apple on Tuesday brought the service to China, mentioning it in an update to its website.

Chinese customers will be able to exchange iPhones as old as the iPhone 4 to receive store credit that can be used towards the purchase of a new unit, according to an Apple store worker in Beijing.

The company, however, will only accept units that were officially sold in China, and not in other countries. Customers can bring the old devices to a local Apple store, where the product serial numbers and overall quality will be checked.

Newer iPhone 5 units will probably receive higher than 1,000 yuan (US$163) in store credit, while older units will receive between 800 and 1000 yuan, the Apple store worker said.

Other iPhone trade-in services have already been around in China. Some third-party shop owners even specialize in buying second-hand units and refurbishing them for sale.

So Apple’s trade-in program will likely face competition. Demand for its service will depend on whether it can offer better prices over rival ones from third-party shops, said Xiaohan Tay, an analyst with research firm IDC.

Chinese website, ihuigo.com, which offers recycling services, showed on Tuesday that a used iPhone 5 could be exchanged for about 1100 yuan, depending on the quality.

But in spite of the competition, some existing iPhone users will feel safer, selling their old units back to Apple, rather than a third-party vendor, said Jason Low, an analyst with research firm Canalys.

“Maybe they are afraid of resellers stealing personal information in their iPhones,” he added.

For Apple, the bigger picture behind offering the trade-in program is to push more Chinese users toward newer iPhones that can run Apple Pay and work with the Apple Watch, Low said.

The company has plans to bring both products to China, which has become one of its biggest markets. Apple Pay, however, can only work with the iPhone 6 and the 6 Plus. The Apple Watch, on the other hand, requires the iPhone 5 or higher version.

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