According to a Reuters, Samsung reportedly has plans to roll out a program that sells used flagship devices as early as 2017. The biggest seller of smartphone devices in the world actually already has a used phone sales business, but it is not clear yet if next year’s initiative will be an extension of the current program.
It is no secret that smartphone sales across the globe has been slowing down, and to deal with this, Samsung is making some efforts to optimize cost efficiencies and register an operating margin of more than 10 percent. As reported by Reuters, initiating a program that refurbishes high end mobile devices, especially those returned by customers under the South Korean tech giant’s upgrade program, should help Samsung protect its revenues from the effects of the global smartphone slump.
Samsung currently has an upgrade program in its homeland South Korea and for the United Kingdom smartphone market. The program is open to customers who purchase Samsung’s latest flagship devices -- the Galaxy S7 and the Galaxy S7 Edge -- by way of the company’s 24 month installment plan. On top of smartphone payments, customers pay about $6 each month, and have the option of trading in their current handsets and then upgrade to a new Galaxy S device or Galaxy Note device after a period of 12 months.
In the United States mobile market, Samsung has a similar upgrade program, but one that only applies to the company’s Tab S2 tablet offering. The company, however, is yet to introduce an upgrade program for smartphone devices that American customers can take advantage of. Still, Samsung currently sells certified preowned devices by way of its official website, where people can purchase, say, a preowned Galaxy S6 at a discounted price.
For the most recent quarter of this year, Samsung registered a net profit of $5.2 billion, which represents a 1.7 percent over its net profit during the same period in the previous year. Additionally, the South Korean mobile giant stamped its dominance by shipping about 80 million units of smartphones around the world, per Canalys. The company is quick to credit the success of its Galaxy S7 flagship device for these impressive numbers.
But there are still other markets across the globe that Samsung needs to expand its presence. In emerging markets such as India, smartphone penetration is still relatively low. Also, the company runs the risk of competing against its own low budget smartphone offerings in emerging markets, especially if it pushes through with its plans to introduce a program for selling refurbished high end handsets. People buying discounted preowned devices with better specs could hurt the sales of brand new smartphones will lesser features.
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