Chinese demand for larger-screen iPhones helped fuel Apple's record profit of $18 billion in the final quarter last year.
Apple Chief Executive Tim Cook has said China is poised toovertake the United States as the company's biggest market, andhe is working to about double the number of stores in GreaterChina by the middle of next year, Bloomberg reported.
Under the China program, Foxconn will buy the iPhones directly, without Apple taking ownership, and repair the devices if needed before selling them on its e-commerce websites such as FLNet and on Alibaba Group Holding Ltd's Taobao online store.
Foxconn, a key Apple supplier, is also in talks to sell the older iPhones in physical stores and may take the trade-in program online in future.
The China plan follows an expansion of a similar program in the United States, where the company has started accepting non-Apple devices, Bloomberg reported.
The China trade-in program currently involves only Apple phones, Bloomberg reported, citing one of the people.
Apple declined to comment and Foxconn could not be reached for comments immediately outside regular business hours.
© Thomson Reuters 2015