The inside story of how Apple offers Rs 7,000 for your old smartphone when you buy an iPhone 4 in India

Apple continues to be aggressive in India with innovative schemes, as it attempts to get a bigger chunk of the premium smartphone segment. After launching the iPhone 5 with zero interest EMI scheme, Apple has now started an upgrade offer for the iPhone 4. Under the offer, buyers can bring any “leading” smartphone to a participating retail outlet and get at least Rs 7,000 off on the purchase of an iPhone 4. The retailer has the final say in the price of the old phone but unlike other schemes, Apple suggests that the buyer will get a minimum of Rs 7,000 off. We dug in a bit to find out how it works, read on.

Before getting into the behind-the-scenes stuff, let’s look at the fine print. The offer is not valid on all smartphones and the retailer has the discretion to offer the scheme or not. The buyer only needs to bring the phone and the charger to avail the discount. Buyers will have to give an undertaking that they are the owners of the phone and the balance payment for the iPhone 4 has to be made by a valid credit or debit card. This is a security measure to ascertain the identity of the seller of the old phone as well as a safeguard from the distributor’s side to ensure that the retailer is actually selling an iPhone and not fleecing them.

So when a buyer goes to a retailer and shows him the phone he wants to exchange, the retailer needs to make a quick call on the resale value of that phone. Essentially, the retailer needs to ensure that he gets at least Rs 2,000 as the distributor pays him Rs 5,000 against the Rs 7,000 discount. The retailer is free to sell the old phone and keep the profits. On top of it, the retailer also gets to keep the dealer margin (approximately Rs 1,000) on the iPhone 4. With the dealer making the call on how much he can pay for the old phone, he stands a chance of making much higher margins on selling an iPhone 4 against other smartphones in that price segment.

“This is a really good scheme. At the moment it is only applicable on the iPhone 4 and we hope Apple pushes it to other models as well,” a prominent Delhi-based retailer told BGR India. The scheme, which is under a trial run, is currently available till April 14.

Apple has become aggressive in the past quarter with regular full front page ads in leading national dailies for its iPhones. Its zero interest EMI scheme has proved to be popular and has also been implemented by Samsung. “Earlier, we used to see a lot of momentum for a couple of weeks or so after the announcement of a new iPhone. Now we are seeing that the momentum is lasting for a longer duration,” a person with close links to Apple told BGR India.

“Thanks to these initiatives, people are still interested in even a two-year-old phone like the iPhone 4. Which other brand can pull this off?” a person with knowledge of Apple’s policies in India told BGR India on the condition of anonymity as he was not authorized to speak to the media.

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