T-Mobile US is shaking up the phone trade-in game this holiday season with an enticing new trade-in deal. Starting 13 December, US customers on a premium plan can trade in a qualifying device—regardless of its condition—and receive up to US$ 1,000 off a new phone from the Apple iPhone 16 series or the Samsung Galaxy S24 line, if the rumor is correct. This offer means even phones with cracked screens or other damage are eligible for the top trade-in credit. For customers whose trade-ins qualify for the full US$ 1,000 credit, this makes high-end models like the iPhone 16 Pro or Samsung Galaxy S24+ entirely free. Is this the future of trade-in globally?
T-Mobile's aggressive trade-in strategy: a path to growth or a short-term solution?
T-Mobile US’s latest trade-in promotion underscores its intent to maintain or even expand its market share—though at a significant cost. By accepting damaged devices for trade-ins, the carrier eliminates a key obstacle for customers seeking to upgrade. This strategy mirrors similar tactics seen in other markets. For instance, during the launch of the Pixel 8 in Japan, Google incentivized Pixel 7 owners with a free Pixel 8 in exchange for their old device. Could this be the blueprint for driving trade-in adoption globally?
Boosting attach rates in global markets
While trade-in rates in the US are thought to reach as high as 40%, other regions like Europe and Asia lag significantly behind, with attach rates struggling to exceed 10%. Offering higher trade-in values has proven effective in encouraging device turnover, as cost savings remain a more compelling driver than sustainability for most consumers.
Challenges in replicating the US model
However, duplicating the US trade-in model globally may not be sustainable in the long term. Subsidizing trade-ins to boost attach rates could strain profitability. In Europe, for example, offering an additional € 200 trade-in bonus has demonstrated its ability to significantly increase volumes. While effective, this approach may not provide a financially viable solution for all markets.
A balancing act for the future
For carriers, the challenge lies in finding a balance between incentivizing trade-ins and maintaining long-term profitability. While aggressive promotions may deliver short-term gains, sustainable strategies will be essential to ensure success across diverse global markets.
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