Apple and Foxconn to partner on iPhone trade-in program in China

Apple plans on teaming up with Foxconn to offer consumers in China a way to trade-in their old iPhone model for credit toward the purchase price of a shiny new one. The program will start inside Chinese Apple Stores on March 31st. Foxconn's role in the program will be to buy the used iPhones and resell them. Under the rules of the program, reps inside the Apple Store will take a look at the condition of the iPhone before determining how much credit will be offered to the consumer in a trade. If a price is agreed to, Foxconn will purchase the used handset directly from the consumer selling it. Apple will not have ownership of the phone.

Foxconn will then repair the handsets and sell them through its e-commerce sites eFeihu and FLNet. It will also offer the used models through Alibaba's Taobao online store. Foxconn is also said to be in negotiations to sell these previously owned iPhone models through retail locations. The contract manufacturer hopes to have the entire process available online in the future.

Increasing the screen-size on its new models put a charge into iPhone sales in China last year, with sales in the country rising 42% over the calendar year to 42.3 million units. Apple was able to grab 12.3% of the Chinese smartphone market in the last quarter of 2014, trailing only Xiaomi during that three month period. Research firm Canalys had Apple as the top smartphone producer in China for Q4 of 2014. The researcher explained that this was quite an impressive feat for Apple considering how the iPhone is priced at double the cost of competing models.

Apple CEO Tim Cook has said in the past that China will someday be Apple's most profitable market. To that end, Apple is doubling the number of Apple Stores in the country by the middle of 2016.

source: Bloomberg