Samsung plans refurbished smartphone selling program
Samsung Electronics Co Ltd plans to launch a program 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 technology 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 maximize its cost efficiency and keep operating margins above 10 percent.
The world’s top smartphone maker will refurbish high-end phones returned to the company by users who signed up for one-year upgrade programs in markets such as South Korea and the United States. Samsung would then re-sell 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 would be sold at, which markets the phones would be sold in or how many refurbished devices Samsung could sell. A Samsung spokeswoman 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.
Refurbished phones could help vendors such as Samsung boost their presence in emerging markets such as India, where high-end devices costing $800 or so are beyond most buyers. Selling used phones could help Samsung fend off lower-cost Chinese rivals that have been eating into its market share, and free up some capital to invest elsewhere or boost marketing expenditure.
The program could help Samsung defend market share in emerging countries by bolstering mid-tier sales. Refurbished phones could also appeal to enterprise clients who want certain security or software products pre-installed on phones to give to their employees, the source said.
The risk of offering refurbished devices is that they could potentially cannibalize sales of Samsung’s other mid-tier devices.