Report: Apple Launching iPhone Trade-in Program

Apple (AAPL) has never been a big fan of the refurbished market for iPhones, but the company plans to soon launch a trade-in/buyback program in conjunction with a mobile device distributor to try to kickstart iPhone 5 sales, according to a Bloomberg report. With demand high in emerging markets for the refurbished iPhone 4 and iPhone 4S, Apple reportedly is willing to offer trade-in/buyback money for older smartphones in exchange for users perhaps upgrading to the iPhone 5.

Apple is said to have struck a deal with Miami-based mobile device distributor Brightstar (STAR) to operate the program. With the iPhone 5 priced outside of some potential customers’ budgets, a trade-in/buyback program for older units could bring an onslaught of new buyers to the smartphone and possibly keep first time buyers away from Android-based phones.

Brightstar maintains customer relationships with some 200 mobile network operators, 100 manufacturers and 30,000 retail customers, according to the company’s website. The distributor runs trade-in programs for AT&T (T) and T-Mobile, handles Verizon’s (VZ) big box retail operation, and works with mobile device makers BlackBerry, Huawei, LG, Nokia, Samsung and others. In fact, earlier this year, when BlackBerry publicized that a single customer had purchased 1 million Z10 units, the buyer was Brightstar.

The iPhone trade-in program will be handled in Apple’s retail stores, enabling customers to receive buyback money instantly, the report said, and also putting them in a setting in which they can immediately upgrade to the new model. Sources cited in the Bloomberg report said used iPhones would not be resold in the United States but in emerging markets, where demand for inexpensive devices is higher.

According to the report, Apple helped Brightstar on AT&T’s and T-Mobile’s recent trade-in promotions. A Brightstar official said the distributor is set to resell more than 15 million devices this year through its trade-in/buyback program, Bloomberg reported.

Apple currently maintains an online reuse/recycling service in partnership with PowerOn, in which it pays users for their mobile devices or computers. Apple signed on to the program in August, 2011 and a year later it was promoting it would pay customers up to $345 for a 64GB model of the iPhone 4S.