Summary
The refurbished iPhones are questionable for 2009 handset trends in that “refurbs” have generally been utilized for replacements, trial offers, and temporary usage.
Analysis
Best Buy’s announcement of refurbished iPhone tries to portray the units in a positive image as “refreshed” and “like-new operating condition”. The devices are priced at $149 compared to AT&T introducing the refurbished iPhones at $99 during New Year’s week. Best Buy is pitching the benefits of its “Complimentary Walk Out Working” and one year warranty. The impact of aggressively retailing “refurbs” might not be positive for the wireless industry. Refurbished equipment of all types has traditionally been offered as replacements, trial offers, and temporary usage. For mobile handsets, refurbs have been promoted for prepaid such as America Movil’s TracFone in their packaged merchandising for Target, Kmart, Walmart, etc. And handset insurance providers like Asurion and Signal Holdings have fulfilled with refurbished replacements, or supply chain vendors like Brightpoint and Brightstar have handled as reverse logistics. It is probably not favorable to relegate the Apple brand to mobile prepaid. And carriers do not want to cannibalize postpaid contracts with trial offers of refurbished phones and free features. But Best Buy retailing refurbished at only a 25% discount appears to be showing the problem of carriers offering 30-day trial periods and subsidizing handsets to acquire two-year user contracts. Best Buy’s 965
