Apple, faced with stepped-up competition in the smartphone sector, started paying up to $280 on iPhone trade-ins yesterday.
While wireless carriers Verizon and AT&T, third-party vendor Gazelle and retailers like Best Buy already buy used phones, the move by Apple is the first time it’s gotten into the business.
The program is aimed at generating increased sales of iPhones — specifically the next generation of the handset which is expected to hit store shelves Sept. 21.
The trade-in programs from each of the companies comes as the used iMarket has been booming.
During the trade-in process, an Apple representative checks the condition of the phone, clicks on a series of prompts on a mobile app on their iPod Touch, and the system spits out the quoted price.
To be sure, just the top-of-the line iPhone 5 with 64 gigs of memory in mint condition will warrant a $380 trade-in value.
Older, more distressed phones will fetch less money.
Apple uses a company called BrightStar to run the program and come up with the offer price for the phones.
The trade-in value changes constantly depending on the dynamics of the market on any given day, so it’s impossible to predict the exact value before the phone is run through the process.
The Post checked out that process yesterday at Apple’s Grand Central Terminal store, and was offered $253 for a like-new 16 gigabyte iPhone 5.
Gazelle offered $330 for the same phone yesterday
The value is heavily influenced by a special inspection for water damage. There is a secret gauge inside the phone, in the SIM card slot, that changes colors if the device has ever sustained water damage.
The water detector is white if there is no damage — but pink if there is.
Prices reported yesterday varied from about as low as $80 to as high as $280.
Consumers don’t walk away with cash. They get a gift card that can be applied toward the purchase of a new iPhone but not other Apple products.
The trade-in value can be used toward a new iPhone, whether the customer is available for an upgrade through their wireless carrier or not. So the trade-in could apply to the already reduced subsidized rate of the phone, which typically costs $200.
The trade-in program is viewed as a way for Apple to keep older iPhone customers coming to its stores for their next purchase. About 20 percent of iPhones are sold at Apple stores.