Why is Samsung selling pre-owned phones?

Korean electronics firm gearing up to enter the refurb market

Samsung is preparing to sell second-hand versions of its own smartphones for lower prices from next year, it has been reported.

The South Korean company plans to sell on previously-owned premium models returned to vendors by customers on one year upgrade contracts, a source told Reuters.

The refurbished handsets could sport a new display, battery or outer casing, depending on its age or damage sustained.

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The source refused to disclose how significantly the prices would be reduced, or the markets Samsung expects to sell the phones within.

Samsung currently sells certified pre-owned phones in the US, typically offering discounts of between $100 to $250. The models ship with the same one-year warranty as new handsets, and

The new programme is likely to be part of a strategy to push its expensive high-end handsets into emerging markets such as India.

Budget manufacturers including Micromax, Oppo and Xiaomi have chipped away at Samsung's share of the low-end Android market in recent years. Selling previously pricey handsets at a reduced cost has the potential to reach many more customers who might then be tempted to shell out for full-priced models in the future, but runs the dual risk of devaluing Samsung's market stance as a premium manufacturer.

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Apple has successfully sold refurbished iPhones in some countries for a number of years, albeit not the UK, which typically sell for significantly more than Samsung models.

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An iPhone tends to retain around 69% of its market value around a year after its launch, while the value of Samsung's premium Galaxy range falls to around 51% of its original price.

Samsung's new project is a bid to narrow the gap between the two, controlling the pricing while simultaneously expanding its market share.

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