Global adoption of smartphones has been rising at a unprecedented tempo. According to a report from analysis agency techARC, there have been over 502 million smartphone customers in India in January 2020, and that quantity is poised to develop sharply within the subsequent few years. Increasing web speeds at accessible costs and cellular options for banking, invoice funds, procuring, and capturing reminiscences are the main explanation why shoppers are turning to smartphones. For higher experiences, shoppers are regularly upgrading to newer smartphones.
Mr. Kunal Mahipal, CEO, Onsitego says; “There was a time when an average consumer would buy a mobile phone and use it for years. However, with the rampant advancement of technology and ever-increasing needs, consumers are directly or indirectly forced to keep upgrading to a new smartphone every two to three years. Some tech enthusiasts end up upgrading to a new smartphone every year, which means shelling out money frequently.“
According to a current report from Deloitte, two out of three Indian shoppers search to change to a new system each 10-12 months. Hence, the used smartphone market is predicted to achieve as excessive as $4 billion by the tip of 2020, resulting in a rise of many re-commerce platforms.
Smartphone customers upgrading to newer fashions often commerce their current gadgets to get some worth again, however that worth reduces because the telephone grows older. The greatest time to promote is a few months earlier than the arrival of a newer mannequin and when the telephone continues to be underneath guarantee. The worth of the system reduces by a big margin because of two principal causes: the system is not underneath guarantee safety and the launch of a newer mannequin results in a additional worth minimize of the older mannequin. A possible purchaser may want shopping for a system that is nonetheless underneath guarantee as that might imply zero-cost repairs, amongst different issues.
Extended Warranty Plans: A Solution to the Problem
Mobile telephone manufacturers and retailers are more and more providing smartphones with bundled prolonged guarantee plans. Consumers may select to purchase prolonged guarantee plans immediately via after-sales providers firms as much as six months after their smartphone buy. Such prolonged guarantee plans supply not solely service assurance for a further yr but in addition greater resale worth even after one yr of buy.
Most common prolonged guarantee plans supply the identical advantages which are often provided with the one-year producer guarantee. In the case of a system malfunction, it’s repaired free of price. Such plans often include no questions requested insurance policies and minimal to no paperwork. Some manufacturers additionally supply free pick-and-drop providers.
Onsitego’s white paper means that the typical price of smartphone restore ranges from 27% to as excessive as 41% of the system price, relying on its worth vary. For instance, changing the defective motherboard of a smartphone priced above Rs. 50,000 might price round Rs. 18,000 on a median. If one thing breaks down, the fee of getting an out-of-warranty system might show to be fairly expensive.
In comparability, prolonged guarantee plans often price simply 5% to eight% of the smartphone’s price, proving cost-effective. In case of breakdowns, it proves cheaper for shoppers to get protection for repairs underneath an prolonged guarantee plan somewhat than spending the entire restore price from their pocket.
“Sometimes, service centers don’t have all the spare parts required for older smartphones, and they might take longer than usual to repair such devices. Buying an extended warranty plan can help in such situations as some plan providers offer repair or replacement guarantee, giving a new device to the user,” Kunal added.
The above graph exhibits the value distinction between an underneath guarantee and an out-of-warranty smartphone’s resale worth. An prolonged guarantee plan is a worthwhile addition to a new smartphone, providing peace of thoughts and the prospect of a comparatively greater resale worth for the customer.
Note: The costs for used smartphones have been taken from common on-line suppliers and bodily retail shops that deal in used merchandise. These costs have been talked about assuming that the telephone is in working situation and has few to no scratches.
