Following in the footsteps of Apple, its biggest rival, Samsung is planning to start selling refurbished smartphones as soon as early 2017, according to an insider. The development comes at a time when the smartphone market has become almost stagnated(almost!).
According to the report, the Korean giant will be selling high-end phones returned to the company by users who signed up for one-year upgrade program in markets such as South Korea and the United States. These phones will be refurbished and sold at a lower price.
The degree of refurbishment and the discount at which these smartphones will be available hasn’t yet been revealed by the electronics company or the source. But most companies that offer such schemes typically replace parts such as the casing or battery. The cost is also significantly lower when compared to a first-hand model.
This program could be very useful for the tech giant when it comes to emerging markets like India. Most buyers in such markets prefer Chinese or local vendors to big brands as they offer similar specifications and features at a consolidated price point. In fact, most flagship smartphones in developing markets are priced at more than $800, which is far beyond an average buyer’s capacity.
The refurbished smartphone program could help the world’s largest smartphone vendor regain its market share that has been stolen by local and Chinese brands. Offering premium smartphones which are lighter on the pocket could just help the company fend off lower-cost Chinese rivals. This, in turn, could allow the company to free up some capital to invest elsewhere or boost marketing expenditure.
Our best guess is that Samsung might be planning to sell these refurbished smartphones at mid-range prices. This would surely boost the company’s mid-tier market. But at the same time, its own mid-range devices might find it difficult to survive in the market.
Enterprises having strict security or requiring pre-installed services could find it more feasible to buy refurbished smartphones in bulk. This could also be a possible target for the Korean giant.
Also, many countries, including India, have straight off rejected proposals of selling refurbished smartphones in their markets in the past. It will be interesting to see how Samsung fares this challenge. According to the insider, though, the plans haven’t yet been finalized.
