Toss Your Old Phone? Think Again

US wireless carriers have found a new appreciation for used smartphones.

Carriers were long happy to let customers drop their old phones in desk drawers or pass them down to their kids. But the market for previously owned iPhones and Androids is booming, producing high and predictable resale values that carriers are starting to exploit. That shift underlies a spate of recently announced plans from T-Mobile US, AT&T and Verizon Wireless that offer users more frequent upgrades. Instead of insisting subscribers pay off their phones in full before becoming eligible for newer models, carriers are now confident they can milk enough value from trade-ins to let upgrades happen more frequently. What this might mean for consumers and device makers isn't yet clear. The new trade-in plans from AT&T and Verizon Wireless have been panned by some smartphone market observers as too costly. And the strong demand for used phones is a sign that many consumers are finding older devices are good enough as the pace of innovation from device makers like Apple Inc. and Samsung Electronics Co. slows.

Still, the emergence of new efforts to capture the value of used phones ultimately could leave the smartphone market more like the auto business, where trade-ins fuel sales of newer models.