By Sarah Krouse 

Wireless carriers have long made smartphones look cheaper to consumers by subsidizing their cost. Now Apple Inc. is trying to woo phone buyers, offsetting the price of devices with generous trade-in offers.

The company has rolled out at least one new iPhone in each of the last several years, adding features that have pushed the starting price of its top-of-line model above $1,000. With less fanfare, Apple has also let U.S. customers trade in older models for credit -- a program it is now hoping will help mitigate the sticker shock.

Apple, which rarely discounts its products, has recently used the trade-in program to incentivize purchases, sweetening offers late last year with an additional $100 credit. The company also has been more aggressive in its marketing of the program, promoting the iPhone XR on its website and in emails to customers at a price of $449 with trade-in of an older phone rather than at its starting retail price of $749.

Apple Chief Executive Tim Cook said last week that making it easier for iPhone customers to trade in their phones directly with the technology giant and more easily transfer their data to new devices were part of its efforts sell more smartphones after slower sales in China and elsewhere led to a rare cut to the company's quarterly revenue forecast.

Apple often gives consumers more for their old iPhones than the four major U.S. wireless carriers, according to a Wall Street Journal analysis of estimated monthly trade-in value data from HYLA Mobile Inc., particularly older models. Hyla works with telecom companies and big-box stores on such programs.

With the iPhone 6, for example, Apple has offered a higher trade-in value than Verizon Communications Inc., AT&T Inc., Sprint Corp. and T-Mobile US Inc. in most months between September 2015 and the end of 2018, the most recent Hyla data show. For the iPhone SE, Apple has offered a higher trade-in value than all four major carriers each month since October 2016. Offers fluctuate by model and storage space.

To date, however, that trade-in pricing edge hasn't been large or well-enough known to consumers to stop an iPhone sales slowdown.

Trade-in programs face some headwinds from customers who aren't swayed by the discount, pass along old devices to other family members or see upgrades as a hassle when their phone continues to function well.

Beth Cole, a real-estate agent in Palm Beach, Fla., upgraded her iPhone 5s to an iPhone 8 Plus late last year. Ms. Cole said she had problems transferring all of her contacts to the new phone and spent several hours at Verizon and Apple stores to resolve the issue.

"I'm going to have this 8 Plus until I die," she said.

Device makers like Apple have been hurt in recent years by changes to the structure of wireless phone contracts. Carriers have offered less-generous promotions and separated the cost of a phone from a customer's monthly service fees, leading to the demise of the two-year ritual of upgrading devices and service contracts simultaneously.

That change has made it easier for carriers to hold onto customers, but tougher for device makers because many consumers would rather stick with their old phones and enjoy lower monthly expenses once their devices are paid off.

Apple customers keep their iPhones even longer than other smartphone owners, according to Hyla. While consumers waited an average of 2.83 years to upgrade in the third quarter, iPhones traded in during the period were an average of 2.92 years old.

Apple's trade-in and recycling program began as an online-only option in 2011 and has since evolved into what is now called Apple GiveBack in stores or on the web. It now offers trade-in credit for Apple's own products and rival devices in addition to the recycling option for phones not eligible for credit.

"Why not put it toward a new iPhone?," an online message says after spitting out an estimated trade-in value for a rival device based on responses to questions about its make and quality.

Attractive trade-in offers give phone sellers a boost beyond the device sale. Winning a purchase from a customer looking to trade in a phone means Apple sits at the center of the consumer relationship, rather than a carrier, getting an advantage on sales of accessories and insurance.

That can keep customers from going to their carrier's retail store, where sales associates have an opportunity to re-up their contracts.

Still, the majority of new devices -- about three-quarters -- are currently bought through carriers, said Biju Nair, chief executive of Hyla. He estimates that 62% of every trade-in dollar is spent in store on either devices, chargers, cases or other accessories and services.

Bill Hampton, 72, upgraded from an iPhone SE to an iPhone X through his employer in December and said that while he enjoys the new phone's faster performance and better speakers, he kept his old device because the trade-in value on offer was limited.

"It's sitting on my shelf in a growing collection of old iPhones," said Mr. Hampton, the editor in chief of newsletter AutoBeat Daily. "I'm oblivious to all these offers."

Tripp Mickle contributed to this article.

Write to Sarah Krouse at sarah.krouse@wsj.com

(END) Dow Jones Newswires

January 08, 2019 11:44 ET (16:44 GMT)