Apple eyes iPhone trade-in program in China

26 Mar 2015 | Author: | No comments yet »

Apple Is Reportedly Planning To Bring Its iPhone Trade-In Program To China.

SALES DRIVER:Apple outlets will reportedly offer store credit for iPhones bought in Greater China and Foxconn will then sell them online through eFeihu and FLNet Apple Inc plans to introduce a trade-in program for iPhones in China, people familiar with the effort said, after a similar program bolstered sales in the US. Foxconn Technology Group isn’t satisfied with just making iPhones, and plans to break into the information security market through an upcoming joint venture.Apple chief executive Tim Cook (C-L) visiting the iPhone production line at the newly built Foxconn manufacturing facility at Zhengzhou Technology Park. Consumers will be able to take older iPhones to Apple stores in China for credit against Apple’s products as soon as Tuesday, the people said, asking not to be identified as the details are not public.

On Thursday, the Taiwanese manufacturing giant announced it would set up in May a joint venture with Korea’s SK C&C, an IT services provider, to develop information security systems for the Chinese market. Foxconn and other foreign businesses in China are fighting to save tax breaks and other benefits promised by Chinese cities and provinces, as Beijing ramps up a campaign against big spending by local governments. Bloomberg said Apple will work with Foxconn, the Taiwanese firm that manufactures its mobile devices, to accept older iPhones from customers in exchange for discounts on a newer model. The venture will be based at one of Foxconn’s factories in China, where it has hired over a million workers to assemble electronics for vendors that include Apple, Microsoft and Sony.

As WSJ’s Gillian Wong and Lorraine Luk report: The crackdown could lessen the attractiveness of foreign investment in China, which totaled $119.6 billion in 2014. Foxconn will refurbish the older models and sell them to new customers online, via its own e-commerce sites and Alibaba’s Taobao marketplace, according to the report. The deal with Foxconn deepens Apple’s relationship with its largest supplier, whose Taipei-listed flagship, Hon Hai Precision Industry Co (鴻海精密), gets half its revenue from making iPhones, iPads and MacBooks.

Hon Hai shares erased a drop of as much as 1.5 percent after the news to close unchanged yesterday in Taipei, while the benchmark TAIEX fell 0.5 percent. Thursday’s deal with SK C&C will also involve the two companies working together on healthcare, finance and improving manufacturing processes, Foxconn said in a statement. Local governments are now balking at honoring previous tax breaks, the groups say, while local officials are seeking guidance from Beijing on other goodies like promises to sell land at a discount or waive social-insurance payments.

While Apple does not break out regional unit shipments, researcher IDC estimates iPhone sales, which previously were tepid in China, spiked 42 percent during the 2014 calendar year to 46.3 million. That ranking was very different one year before, when Samsung (18.8 percent), Lenovo (13.2 percent) and Huawei (10.2 percent) had outsold Apple (7.4 percent) and Xiaomi (6.5 percent).

Business groups have complained that China uses its antimonopoly law to target foreign companies, though China says it has also stepped up enforcement against local companies.

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