Tag Archives: second hand

Resales of year-old iPhones start heating up

More customers are upgrading to the latest Apple smartphone every year, creating a bigger market for the previous year’s models.

Want a year-old Apple iPhone on the cheap? Your chances of snagging one are now better than ever.

More customers are moving to upgrade their smartphones more quickly, as US wireless carriers transition away from the two-year contract. That’s creating a much bigger resale market for used iPhones that are just a year old, according to data shared with CNET from both eBay and Gazelle.

“I think we’re seeing an underlying trend that upgrade cycles are accelerating,” said Sarah Welch, chief marketing office for Gazelle, a retailer specializing in electronics trade-ins. “There’s much more variation now with how people purchase or lease their phones.”

These statistics, however, don’t mean most people now upgrade every year. In fact, a whole other set of customers now appear to be holding onto their phones for longer, or buying used phones, as the motivation for them to upgrade every two years dies off, Welch said.

So when is the best time to buy or sell a used model?

Representatives from both eBay and Gazelle said that on their sites prices for year-old models face their steepest decline a few weeks before a new iPhone is announced. So, sellers should be warned of that big drop, even if many of them can’t avoid it.

For buyers, the most listings tend to hit eBay the days immediately after a new iPhone goes on sale publicly, which occurred Friday with the iPhone 6S and 6S Plus.

“We’ll see tens of thousands of listings starting to add to our site on a daily basis,” said Hal Lawton, eBay’s senior vice president of North America.

That means the best selection and pricing for older models on the marketplace will likely be from Monday to Wednesday, said Vincent Payen, eBay’s head of consumer selling.

So far, though, the resale market isn’t offering many clues on how successful the new iPhone 6S will be. Still, the off-cycle “S” year, in which Apple adds some features but waits to do a major overhaul the year later, is expected to encourage fewer resales, Payen said.

“Last year, we saw massive, massive activity like we have never seen before,” Payen said. “This year, it’s too early to call.”

Tagged , , , , , ,

You may already be holding someone’s next hot smartphone

The business for used smartphones is exploding as more consumers consider the second-best option behind the latest and greatest.

For smartphones, used is increasingly becoming the new.

While gadget enthusiasts still clamor for the latest and greatest gear, a growing number of consumers are considering buying secondhand smartphones. On Wednesday, research firmGartner released a report projecting the used-smartphone market to roughly double to 120 million units, or a wholesale value of $14 billion, by 2017.

Consumers have long dumped their old gadgets onto the secondary market, but the numbers underscore the growing maturity of the business. Previously, used cellphones primarily ended up in the hands of consumers in developing markets looking for a cheap way to communicate. But that’s changing.

With consumers increasingly looking to tighten their belts, a year-old smartphone at a steep discount doesn’t seem like a bad deal. That thinking is bolstered by the wireless carriers’ push to get its subscribers to pay the full price of a device. And for those who need the latest and greatest, selling off the old — but still relatively high-end — phone is an attractive way to recoup some funds

“With consumers in mature markets upgrading their smartphones every 18 to 20 months, the inevitable question is what happens to the old device?” said Gartner analyst Meike Escherich.

Many companies are capitalizing on this trend. One such player is Gazelle, an e-commerce company that specializes in enabling people to sell used electronics. In October, Gazelle began offering the option to also buy used smartphones. By December, the store made up a fifth of its revenue, according to CEO Chris Sullivan. He expects it to make up half its revenue in the next 12 to 15 months.

“It’s a huge market that’s growing fast,” Sullivan said in an interview.

He believes Gartner’s estimate undervalues the market size, saying that the final price of the smartphones could lift the total value to $20 billion or more by 2017.

Gazelle’s own studies found that within the same household, one member of a family could be constantly upgrading to the newest smartphone, with other members either taking the secondhand phone or buying a cheaper used model. Consumers who end up losing their phone but aren’t yet eligible for a discounted upgrade will also consider the used option.

A big driver of this trend has been the increased awareness of the true value of the smartphones. A subscriber who signs up for a two-year service contract only has to pay $199 for the basic iPhone 6. But that’s a discount the person receives for agreeing to stay locked into the carrier at a higher rate. Without the contract, that same iPhone 6 would cost $650.

The carriers are quickly shedding the subsidy model. T-Mobile has scrapped it completely, while a growing number of customers on AT&T and Verizon are opting to pay for their smartphones in exchange for lower service fees. Sprint offers a leasing program where customers turn their smartphones back in to Sprint after two years.

The growing used market could have an impact on the smartphone manufacturers themselves, since fewer consumers may consider its newest model, Escherich said. On the flip side, this model allows tech enthusiasts to keep upgrading — with most of them preferring to stick to a single brand.

Indeed, consumers have grown savvy about selling their existing smartphone to defray the cost of their new purchase — particularly ahead of the launch of a new iPhone or other flagship product. In 2009, only 9 percent of consumers sold their smartphones, according to a survey taken by Gazelle. By 2013, that number jumped to 31 percent.

Gazelle calls its products “certified pre-owned” smartphones, taking a page from car dealerships. The company takes the product and certifies that it is in working order, repairing major damage like the display or battery, and posts it on its own website.

It’s not alone in this business, with retailer GameStop, online stores and the carriers themselves offering used smartphones.

But Boston-based Gazelle has been so successful on the sales end that it needs to look for new sources of inventory, Sullivan said, adding that he was considering buying excess inventory from the carriers and affiliate partners.

“What we’re offering is a channel that provides better pricing than traditional wholesale markets,” he said. “It’s a commercial opportunity for players in this space.”

Tagged , ,