Samsung mulls over refurbished smartphone sales scheme
Samsung is reportedly planning to launch a smartphone refurbishment sales program in order to maintain a strong market presence in the mobile sector.
As reported by the Reuters news agency, the South Korean tech giant will sell used and refurbished smartphones of the Samsung brand -- including premium models -- in a new program that could launch as early as 2017.
According to people familiar with the matter, Samsung will refurbish devices returned by users who are part of upgrade programs in countries including South Korea and the US, allowing customers to upgrade their handsets every 12 months.
These devices will then be cleaned up, refurbished, and sold on to other customers for a discount.
However, it is not known how cut-price these models will be, nor how many Samsung could support refurbishing and selling when the reported program launches, as older handsets may need new batteries, cases, or screen repairs.
In the second financial quarter of 2016, Samsung reported a jump in profits by 18 percent to $3.82 billion thanks to the rising success of the tech giant's mobile department. Revenues increased in part due to strong sales of the Samsung flagship Galaxy S7 and S7 Edge models.
While Samsung is enjoying the rewards of launching popular, premium devices, a refurbishment program could assist Samsung in tackling markets where cheaper devices are most popular -- or simply the only ones that are affordable.
Samsung could, for example, focus on penetrating emerging markets, such as China, India, and Brazil. By offering discounted handsets in these countries -- where it is often the case that premium smartphones are too expensive for the average consumer -- Samsung could boost sales and take on rival companies that offer local, cheap handsets.
However, Samsung might not be met with fanfare in every potential market, as India's government recently proved. In May, the Indian government turned down Samsung's rival, Apple, which requested to sell refurbished handsets in the country, claiming sales would increase electronic waste -- despite a recent agreement to host a new Apple manufacturing facility in India.
In May, research firm Gartner said that Android-based smartphones and tablets continue to slice away at the hold of Apple iOS, and manufacturers of cheaper handsets including Huawei, Oppo, and Xiaomi are beginning to catch up to Samsung in relation to market share.
While the South Korean electronics maker continues to dominate the field with an estimated market share of 23.2 percent, companies like Oppo are enjoying strong sales with fierce growth in China.
The mobile market is not only highly competitive but is also concentrated in areas such as Europe -- and if players like Samsung and Apple are going to stay ahead of the game, they must look toward developing markets that have not yet reached high levels of mobile device penetration.
A Samsung spokesperson said the company does not comment on speculation.