According to Reuters’ sources, Samsung wants to maximize its cost efficiency and keep operating margins above 10 percent. As such, it will refurbish high-end phones returned to the company by users who’ve signed up for one-year upgrade programs in markets like South Korea and the US; it will then sell these devices at lower prices.
It’s unclear as to how deep the discounts for refurbished phones will be, and where they will become available. However, it’s worth noting that not every country welcomes the sale of secondhand goods; the Indian government has blocked Apple’s plans to sell refurbished iPhones, even though the company is set to open retail stores there in the near future.
The move should help Samsung bolster its position in markets where it’s losing out to Chinese rivals that offer handsets with similar specifications at lower prices. There is, however, a risk of devaluing the Samsung brand in countries where high-end phones are regarded as status symbols.