Check out the new iPhone 12 models 2:36
(CNN Business) -
Apple this week expanded the price range for its flagship smartphones, announcing the iPhone 12 mini at $ 699 for users who are reluctant to spend more than $ 1,000 on more premium models.
But for people who want to spend even less - in one case, absolutely nothing - to upgrade, Apple and the major wireless service providers offer steep discounts to those who exchange their old devices.
T-Mobile and Verizon offer customers trade-in credits ranging from $ 200 to $ 850, depending on how old their phone is and whether they already have a plan with the carrier.
AT&T, meanwhile, will effectively give customers a free phone if they commit to an unlimited data plan for 30 months while also trading in older phones worth at least $ 95. (AT&T (T) owns CNN's parent company, WarnerMedia).
Apple and other smartphone makers also offer their own trade-in programs, as do some third-party resellers.
Apple currently offers discounts of up to $ 500 for the iPhone 12 line if you trade in your old smartphone, depending on its age and condition.
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The exchange values of old smartphones can be surprisingly high because the exchange has become a fundamental part of the device life cycle.
Beyond giving users the opportunity to get a new phone for a fraction of the price, it helps companies drive sales by generating more frequent updates, it gives operators a way to attract customers to long contracts, delivers more affordable devices to secondary markets and provides materials that companies can reuse to make new phones greener.
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The upgrade drive
Trade-in programs give wireless service providers and manufacturers a way to attract new customers and prevent existing users from abandoning their products, as we saw with AT & T's free iPhone offering.
"It's probably the closest thing to reviving subsidies, which were rife in America when the iPhone hit the market," said David McQueen, director of research at technology advisory firm ABI Research.
One major issue the exchanges aim to address is the growing trend of smartphone users to keep their devices longer, often skipping a model or two (sometimes even more) before purchasing a new one.
"Subscriber motivation to upgrade smartphones has been a problem in recent years and most flagships have very little differentiation from their predecessors," McQueen said.
MORE: You can now order the new iPhone 12 and iPhone 12 Pro
While companies are hoping that the speeds and features of 5G will provide reason enough to upgrade, industry estimates point to the fact that such capacity isn't really that important a factor for consumers.
The still nascent spread of 5G networks around the world and limited use cases for smartphones compared to more advanced technology such as self-driving cars will likely lessen the appeal for some people to switch yet.
"At the moment, there doesn't seem to be any real reason for [operators] to upgrade to 5G, other than for it to be marketed as another 'G," added McQueen.
It's too early to tell how well the iPhone 12 lineup will sell, but if 5G isn't a huge draw, exchanges could help move additional updates.
Lubezki demonstrates how to make movies with an iPhone 12 Pro 2:00
Back to the market
Smartphones often have a lifespan and usability that go well beyond the frequency of new model launches, providing businesses with an additional source of revenue for even older devices.
Apple shipped more than 11 million devices for refurbishment in 2019, according to the company's latest environmental report.
McQueen says that phones that aren't resold by smartphone carriers or companies could also end up with insurance companies to replace lost or broken devices for their customers or shipped to emerging markets where consumers tend to be more price conscious.
MORE: iPhone 12: Everything You Need to Know About Apple's New Line of 5G Phones
Most of the growth in the refurbished smartphone market last year came from regions like India, Latin America and Africa, according to a recent report from Counterpoint Research.
The programs also sell refurbished phones to users willing to buy slightly older premium models, analysts say.
“[It's] kind of like the used car market;
there are some people who would rather have an older Mercedes than a 2021 Hyundai, "said Ross Rubin, principal analyst at Reticle Research.
"This allows them to have more aspirations, in a sense, without having to pay the $ 700 or more to buy the current generation."
And it is a trend that seems to be getting stronger.
Research firm IDC predicted earlier this year that around 333 million used smartphones will be sold in 2023, nearly double the number sold in 2018, for a total market value of $ 67 billion.
What's inside matters
Another reason old phones are valuable to businesses is because of their content.
Apple has worked to curb the environmental impact of its massive global manufacturing operations, expanding recycling programs and promising to become fully carbon neutral by 2030.
"Manufacturers have emphasized this approach more, they talk about the recycled materials they use to make their phones," said Rubin.
As part of that effort, Apple touted this commitment to sustainability during Tuesday's iPhone launch event, boasting that the magnets in the iPhone 12 line are made from 100% recycled earth materials.
For several years, the company has developed and displayed robots that disassemble older iPhones and separate components that can be reused for new devices.
The company also recycles other materials such as aluminum and tungsten that are used in new products.
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