Samsung is reportedly developing a recycling program of sorts in which it would sell refurbished, used versions of its high-end smartphones.
According to Reuters, which spoke to a person "with direct knowledge of the matter", the company wants to revive its mobile profits and maximise its cost efficiency, so it's looking to launch a program that will involve refurbishing premium phones returned by users who are part of its upgrade programs in countries such as the US and South Korea. The new program should launch as early as next year (2017).
Once the phones are refurbished, Samsung would resell them at a lower price, though it's not yet clear how much of a discount they would get, where they would be sold, nor how many refurbished devices Samsung plans to sell. It's also unclear how exactly they will be refurbished, but one can assume the company is ready to fit them with new parts like casings or batteries.
Keep in mind refurbished phones could help Samsung in emerging markets, such as India, where high-end devices that cost $800 each are too expensive. Apple, for instance, already sells refurbished phones in some markets, including the US, and it is trying to do so in India, where Reuters said the average smartphone costs less than $90. This new program would help Samsung compete against not only Apple but also Chinese rivals.
Samsung's market share is being eroded by cheaper handset makers coming out of China. Examples include Huawei, Lenovo, Oppo, and others. By selling used phones, Samsung could free up capital to invest elsewhere, and if more consumers start to buy refurbished, used premium models instead budget brands, it'll be able to cannibalise sales of new devices coming from those cheaper handset makers.
Refurbished phones might also lure enterprise clients who want Samsung's security, software, and hardware for a fraction of the price. The only obvious downside Samsung could face is the cannibalisation of its own mid-tier devices.