Last June, it was reported that Apple was planning to launch a trade-in program that would allow current iPhone users to trade their old devices at Apple Stores and get a gift card which they can use to purchase a newer model.

According to sources, the trade-in program is already in play in some pilot Apple Stores, and is already processing multiple trade-ins a day.  The scheme is expected to launch more widely in September, just in time for the arrival of the new iPhone that’s set to be unveiled on September 10.

Apple does of course, already have a recycling program that allows customers to send their old devices in by mail and recieve a Gift Card in exchange for their recycling efforts – so long as the device still has monetary value. If not, at least these people can feel good that they done their bit towards reducing electronic waste :)

The trade-in program works much like the recycling program, but instead of sending it by mail, customers will have to go to an actual Apple Store to have their trade-in processed. The program will be launched in partnership with Brightstar Corp., a mobile phone distributor that handles trade-ins for AT&T and T-Mobile in the US.  The plan is for the traded-in devices to be refurbished and sold in emerging markets at more affordable prices.  This way, nothing goes to waste and everyone can afford to get an iPhone – even if it’s an older model.

How it works

With the new scheme, all you have to do to trade in your device in this way is to walk into an Apple Store with your working and undamaged iPhone, and the device will be evaluated by Apple’s staff.  You’ll likely be asked a few questions to determine the health, condition, and monetary value of your device, but that’s about all.  The pilot trade-in program values a 16GB iPhone 4 and 4S at around $120-200 (depending on the wear and tear) and a 16GB iPhone 5 in good condition goes for $250.  The value of the devices are expected to change once the trade-in program becomes available at more Apple Stores.  The cash equivalent of the device will be put into a Gift Card, which can then be used to purchase a new iPhone.

There is a catch though.  Even if your device still has monetary value, you can’t just go in for a cash-back or get the Gift Card.  It’s a trade-in so you must come with the old device and leave with a new device.

As stated earlier, the trade-in program is already in play in some Apple Stores and the traded iPhones are placed in a bag and presumably will be refurbished and shipped to emerging markets.

Why this will work

For some people, it’s all about the brand

Apple is trying its hardest to reach more consumers but with the price of the iPhone what it is, they know full well that not everyone can afford it.  A trade-in program is a smart idea because it will encourage people to take care of their devices so they can trade that in when a new device is launched.  Plus, it lessens the amount of money consumers will have to pay for the new device.  So it’s like getting a brand new iPhone every time at a discounted price.

As for the trade-ins happening only at Apple Stores, it’s a smart move.  If everything gets done in one place, people will see the trade-in program as a convenient way of ridding themselves of their older iPhones and at the same, getting a new one.  Plus, even if someone just goes there to look around with no intention of trading up, when they see how easy and affordable it is to get a new iPhone, many of them won’t think twice to trade up.

Will this work?  Of course.  What fanboi would pass up the chance to get their hands on a new iPhone at a discounted price?  Will the refurbished iPhones be welcomed by consumers in emerging markets?  Yes, because even if the iPhone doesn’t have the Jedi-like features of the some Galaxy devices, the fact of the matter is, the brand is all that many consumers are after.  Owning an Apple-branded device is like owning a designer bag for some.  Refurbished or not, it’s all in the brand.