Samsung Electronic KRW5000 (OTCMKTS:SSNLF) is reportedly planning to sell refurbished smartphones at majorly reduced prices.
According to a report, the tech company is planning to resell refurbished smartphones as early as next year. The source of the rumor didn’t detail how deep the discounts would be or where the devices would be sold at. It’s possible this could be Samsung’s plan for selling smartphones in India and other developing countries.
While Samsung may be interested in selling its smartphones in India, it will likely be met with resistance from the country’s government. Apple Inc. (NASDAQ:AAPL) had its own troubles being able to sell smartphones in the country. It never reached a point where it could sell refurbished smartphones in India due to the country’s “Made in India” restrictions.
Another problem with the idea that Samsung could sell its refurbished smartphones in India has to do with prices. The average price for a smartphone in the country is $70. Even with the company discounting its refurbished smartphones, it’s unlikely that the prices will go that low.
If Samsung chooses to go with the refurbished smartphones plan, it could help the company’s profits. This would be possible by letting it sell the same device twice, even if the second selling is at a lower price. However, there is the risk that the company will hurt sales of its new devices with the cheaper refurbished smartphones.
“Some consumers may prefer to buy refurbished, used premium models in lieu of new budget brands, possibly cannibalizing sales of new devices from those budget manufacturers,” Deloitte, a professional services firm, told Reuters.
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