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 cell options for banking, invoice funds, buying, and capturing recollections are the main explanation why customers are turning to smartphones. For higher experiences, customers are continuously 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 customers search to modify to a new system each 10-12 months. Hence, the used smartphone market is predicted to succeed in as excessive as $four billion by the top of 2020, resulting in a rise of many re-commerce platforms.
Smartphone customers upgrading to newer fashions normally commerce their current gadgets to get some worth again, however that worth reduces because the telephone grows older. The finest time to promote is a few months earlier than the arrival of a newer mannequin and when the telephone remains to be underneath guarantee. The worth of the system reduces by a big margin as a result of two essential causes: the system is now not underneath guarantee safety and the launch of a newer mannequin results in a additional value lower of the older mannequin. A possible purchaser may want shopping for a system that is nonetheless underneath guarantee as that would 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 also can select to purchase prolonged guarantee plans straight by after-sales providers firms as much as six months after their smartphone buy. Such prolonged guarantee plans provide not solely service assurance for an extra 12 months but in addition greater resale worth even after one 12 months of buy.
Most fashionable prolonged guarantee plans provide the identical advantages which might be normally provided with the one-year producer guarantee. In the case of a system malfunction, it’s repaired free of price. Such plans normally include no questions requested insurance policies and minimal to no paperwork. Some manufacturers additionally provide 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 value vary. For instance, changing the defective motherboard of a smartphone priced above Rs. 50,000 may price round Rs. 18,000 on a mean. If one thing breaks down, the fee of getting an out-of-warranty system may show to be fairly expensive.
In comparability, prolonged guarantee plans normally price simply 5% to eight% of the smartphone’s price, proving cost-effective. In case of breakdowns, it proves cheaper for customers to get protection for repairs underneath an prolonged guarantee plan relatively 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 reveals the worth distinction between an underneath guarantee and an out-of-warranty smartphone’s resale worth. An prolonged guarantee plan is a priceless addition to a new smartphone, providing peace of thoughts and the prospect of a comparatively greater resale worth for the client.
Note: The costs for used smartphones have been taken from fashionable 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.