A movie summarizing 'What happens to the iPhone that was traded in?'

Apple offers a device trade-in program called

Apple Trade In , which allows users to get discounts on new device purchases. The Wall Street Journal is covering what happens to the iPhone that was issued to this trade-in program.

How a Traded-In Apple iPhone Gets Refurbished | WSJ-YouTube

When a new iPhone appeared, there should be many people who have traded in their old iPhone.

Such a used iPhone is sent to a certain warehouse.

The used mobile phone market is now a $ 64.5 billion (about 8.6 trillion yen) market.

There is also data that in 2022, 73.5 million pre-owned and

refurbished smartphones were shipped in North America alone.

The second-hand smartphone market is exploding, and manufacturers and mobile carriers are stepping up and promoting trade-in programs. This situation is the same not only in the United States but also in Japan, and the number of second-hand smartphone sales in 2021 has reached a record high .

Mr. Yoanna Stern, who works as a senior personal tech columnist at the Wall Street Journal, investigated the actual situation of such a used smartphone market. “When I ask mobile carriers and Apple to tell me where the traded-in devices go and how they make money, they won’t give me specifics,” he said. I came to the warehouse in the middle.'

This is a warehouse owned by a company called

US Mobile Phones (USMP).

Mr. Sammy Saber, Operations Director at the USMP, appeared.

This USMP-owned warehouse receives tens of thousands of iPhones every week. The senders are a mobile carrier and Apple, a company that traded in iPhones from general users. It seems that 3000 iPhones are stored in the following three boxes.

Some of the used iPhones obtained by the USMP are sent to wholesalers outside the United States, and some are cleaned and serviced and then sold as refurbished items on Amazon and

Back Market .

For example, for a 128GB iPhone 11, Apple and mobile carriers will trade in for $200 (36,000 yen in Japan). After that, the USMP will perform cleaning and maintenance work, and Amazon and Back Market will sell it as a refurbished item for $ 350 (

55,557 yen for Amazon.co.jp ).

The cleaning and maintenance work performed by the USMP is as follows. First of all, the process called 'Data Erasure and Triage' is performed.

First, connect the second-hand iPhone to the PC with a Lightning cable.

The connected PC has special software installed to remove customer information from the device, which is used to remove personal information.

When the data deletion is completed, the inspection starts to see if the iPhone works properly. First, the display is checked, and it is checked whether red, white, green, etc. are displayed normally on the display.

Next, a check is made to see if the iPhone's physical buttons work properly. Press the side button and volume control button to take a screenshot and confirm that the buttons work.

In addition, take a selfie for camera check.

Make a sound to check the operation of the speaker.

In addition, check whether the flash on the back shines normally.

Next is the operation check test of the touch screen that traces and destroys things like bubbles displayed on the display with your finger.

Finally, make a phone call and check if the network function works normally.

This is the end of the iPhone operation confirmation test.

Next we will enter the 'Cleaning' process.

Manually clean your iPhone with a toothbrush, plastic pegs, microfiber cloth, foam sponge, and disinfectant.

The third process is 'Grading' work.

After checking the operation and cleaning work, the worker visually checks the iPhone and performs a rating work to decide the price at the time of sale. It seems that we will check whether there are any scratches on the front glass, housing, back glass, and perform grading work.

Finally, we will do 'Kitting (set work)'.

This is the process of packing the Lightning cable for charging together with the repaired iPhone.

The iPhone is wrapped in a fairly thick packing material, so you don't have to worry about damaging the device if you drop it.

Apple is no longer selling the iPhone 11 on its official store. However, it seems that a new iPhone 11 128GB model is sold at a general retail store for about $ 500 (about 66,000 yen). However, the refurbished iPhone 11 128GB model maintained by the USMP can be obtained at a much lower price.

According to the USMP, the company will purchase the iPhone 11 128GB model traded in from users by Apple and mobile carriers for $200 (about 27,000 yen) for around $250 (about 33,000 yen). After cleaning and maintaining this, USMP will sell it on Amazon and Back Market for $ 350 (about 47,000 yen).

Normally, the price of refurbished products varies depending on the grade, but on average, it is common to set the price so that it can be purchased 20 to 30% cheaper than the selling price of a new product. This makes it an attractive option for consumers to get an iPhone at a low price, and a maintenance company can make a certain amount of profit.

However, cleaning and servicing second-hand iPhones requires a huge amount of labor costs, and a lot of expenditure is incurred as the Lightning cable is included when selling.

In addition, if there is a problem with the battery of the iPhone, it will be necessary to replace it with a new one and sell it as a refurbished product, so it seems that there are situations where there is no choice but to sell it at a loss depending on the product.

“There are more winners than losers in this business,” said Stern, who has researched the process from used iPhones being traded in, to being bought by second-hand repair shops, to being refurbished after being cleaned and serviced. Mobile carriers make a profit by selling new iPhones based on traded-in iPhones, and general customers can use the trade-in program to buy new iPhones at a lower price. Second-hand iPhones will be resold as refurbished products, so it is environmentally friendly.The disadvantage may be that Apple's stock price will drop because they want to sell a lot of new iPhones, but for Apple, refurbished products If it gets into the hands of more users, especially in developing countries, it should increase market share and lead to more users using the iPhone.'

in Mobile,   Video, Posted by logu_ii