Don’t get me wrong. I know major cities in the US are struggling to deal with crime involving mobile devices. Government officials plan to call on device makers and others in the industry to address the problem. A recent study claims that stolen phones cost US consumers $30 billion last year. In addition, carriers have agreed to share key information (IMEI) about the devices with each other to ensure that phones are deactivated more quickly (this is supposed to be implemented this year). However, often stolen phones--which are just tiny computers-- end up on the black market and sold internationally. It is no wonder then that in a city like Washington DC, 40% of all forced robberies last year involved a mobile phone, which is the highest in the US. However, is Jeff Rossen really correct in singling ecoATM out as the sole culprit here? Are criminals more motivated to use an automated kiosk where their photo is taken and figure print is captured?
Surprisingly, according to many articles citing police reports recently, the answer is yes. In fact, when police officials found 6 stolen phones in ecoATM kiosk, concerns were heightened to the extent that one ecoATM machine was shut down (evidently for not having the proper merchant license). One report cited a spokesperson for the D.C. Police saying, “This is a huge problem. The opportunity for quick cash is driving robberies of smartphones.” An ecoATM spokesperson says that stolen phones are only one tenth of 1% of the phones the company collects. Nonetheless, the company has spent months dealing with this finger pointing.
(Note: ecoATM has offered a rebuttal to the Rossen Reports story in which he failed to include details around how ecoATM has partnered with the police. And, the mugging shown in the segment was not associated with ecoATM at all. To read the entire rebuttal by ecoATM founder and CMO, Mark Bowles, click here. )
Tighter regulations around program requirements may be in order to deter thieves from hocking stolen phones via these programs but ecoATM is not the only company out there offering cash for mobile devices. And, as it stands today, many of the companies are offering great deals to buy back used phones. In fact, the same week that ecoATM was being thrown under the bus, Gazelle, the online recommerce vendor, reported that it has paid out $100 million to customers who sold back devices to them. Bamboo Mobile (via the Idle Device Market Report published in January) estimated that in 2012, about $876 million was paid out via trade-in and buy back programs in the entire industry. We believe that by 2015, that number will more than triple to $3 billion as more smart phones and tablets are bought back.
Finally, the other big story this week were reports that Apple will launch an in-store iPhone trade in program with Brightstar. Neither company commented on the reports, however. Apple does have an online program ( it uses recycling vendor PowerON) where a customer can sell back an Apple-based product in exchange for an Apple Store gift card. Recently, Bamboo Mobile examined Apple’s program for our Online Trade In Ratings and Assessment report. We found the program had few customer requirements (little customer info is collected) and was rated average due to how the program includes buying back only Apple products. Yet, the new in-store program is designed to be more convenient for shoppers coming in to the store but, again, is said to be limited to only iPhones. Nonetheless, the question remains whether this move by the Cupertino-based giant will increase the visibility of device trade-in programs in general? It just might since it made the national news blitz this morning. But at the same time, will the likes of Jeff Rossen be suspicious of Apple’s trade-in program and do a consumer report stating that its program is promoting “Apple picking?” I kind of doubt it.
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