This is how a used iPhone unit gets a second shot at life

According to TNW, the company that Apple selected to handle its trade-in business is an Irish firm called Alchemy, and in 2020 the company, with four employees and $2.5 million in pre-seed funding, won over Apple. James Murdock, Alchemy's CMO, told TNW, "Buying refurbished goods has got a huge tailwind at the moment. More and more people want to do things that are both good for the environment and good for their wallets."

That bodes well for business at Alchemy. Apple's trade-in option allows a consumer to trade in one or more Apple products and get a discount toward the purchase of a new one or receive Apple Store credit. When you trade in an Apple device toward the purchase of a new one, the older unit(s) end up in one of the 60 warehouses that Alchemy has strewn throughout Asia, Europe, and the U.S.

The devices accepted in a trade include iPhone handsets, iPad tablets, Apple Watches, Macs,  and Android phones. As soon as a device comes into an Alchemy warehouse, special software is used to wipe all user data off of it while factory resetting the device. "When you trade in an Apple device it’s Alchemy's system that takes the title from the consumer, it’s us that has the second-hand dealer license, it’s us that receives it and ensures that it’s data safe," Alchemy's Murdock says.

Apple audits the firm twice a year, every six months, because it is knee-deep in user data. The CEO adds, "It’s a pretty serious business as you’d imagine." And we would add that there are serious consequences if Alchemy doesn't handle this just right. The next step is to run the trade through an algorithm called Jupiter which runs a diagnostic test. Any issues that can be repaired at a favorable price will be fixed. Otherwise, the device will be pushing up daisies. And by daisies, we mean Apple's robot Daisy.

Daisy disassembles old iPhone models and collects the parts that can be used another day. Despite refurbishing certain units and recycling the parts on others, plenty of old models still end up buried in a landfill. Keep in mind that each Daisy robot can only disassemble 1.2 million iPhone units a year. Less than 1% of the devices sent to Alchemy are recycled as the company focuses on refurbishing trade-ins and its new plant in Miami will refurbish as many as 60,000 units per month; other company factories located worldwide are also given the task of freshening up an older device.

An algorithm called Apollo looks at past sales trends and predicts future prices. The more devices Alchemy sells, the more accurate these pricing forecasts become. Nonetheless, pricing a refurbished Apple device requires some guesswork says CEO Murdock. Some of the refurbished devices are sold on Alchemy's own Loop Mobile website. Loop Mobile also

does business on websites belonging to Amazon and Walmart.

Murdock notes how the refurbished phone business has changed. "In the early 2000s the advances in technology between models was huge," said Murdock. "When a new Nokia 95 or HTC device came out it left the old model obsolete. But now, the tech curve has flattened somewhat, leaving older phones with decent residual value. As you can imagine, this has been a game-changer for the refurb market."

As for Apple devices, the executive states that they "hold their value better than any other tech brand." A good example involving Alchemy is that the firm sells 15,000 iPhone 8 models a day even though the phone was originally released in 2017.

The refurb market has been good to Alchemy. Last year, the company grossed $442 million and aims to hit $700 million in revenue this year with $1 billion as the target for 2024. To date, it has sold 3.7 million refurbished devices. That's good for the environment, good for the buyer, and good for Alchemy.