The price of an used iPhone is critically important to Apple’s business model. Used iPhone retains their value much better than their Android counterparts. When you trade in your used iPhone (worth $250-400) for a new iPhone that cost $1000, you essentially are only paying for $600 (excluding the opportunity cost etc).
Furthermore, it extends the lifecycle of the core and peripheral (service revenue) product and extends deeper into the customer segment. But I guess this in part a chicken-or-egg situation, as your hardware product segment needs to (1) have deep brand equity and/or (2) useful life is deep and the real incremental value-add is marginal in order to pull this off this move.
Intersection notepad 