Samsung to resell refurbished used smartphones?

LIFELINE: Samsung's Galaxy Note 7 (pictured) was launched on Aug 11.


    Aug 23, 2016

    Samsung to resell refurbished used smartphones?


    SAMSUNG Electronics plans to launch a programme to sell refurbished used versions of its premium smartphones as early as next year, a person with direct knowledge of the matter told Reuters.

    The South Korean firm is looking for ways to sustain earnings momentum after reviving its mobile profits by restructuring its product line-up.

    As growth in the global smartphone market hits a plateau, Samsung wants to maximise its cost efficiency and keep operating margins above 10 per cent.

    The world's top smartphone maker will refurbish high-end phones returned to the company by users who signed up for one-year upgrade programmes in markets such as South Korea and the United States.

    Samsung will then resell these phones at a lower price, the person said, declining to be identified as the plan was not yet public.

    The person declined to say how big a discount the refurbished phones will be sold at, which markets the phones would be sold in or how many refurbished devices Samsung could sell.

    A Samsung spokesman said the company does not comment on speculation.

    It was not clear to what extent the phones would be altered but refurbished phones typically are fitted with parts, such as a new casing or battery.

    Apple's iPhone has a resale value of around 69 per cent of its original price after about one year from launch, while Samsung's flagship Galaxy sells for 51 per cent of the original price in the US market, according to BNP Paribas.

    Refurbished phones could help Samsung boost its presence in emerging markets such as India, where high-end devices costing US$800 (S$1,080) or so are beyond most buyers.

    Apple sells refurbished iPhones in a number of markets, including the US.

    It is trying to sell such iPhones in India, where the average smartphone sells for less than US$90.

    Selling used phones could help Samsung fend off lower-cost Chinese rivals and free up some capital to invest or boost marketing expenditure.