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Second-hand iPhone market going strong, Apple and carriers don't mind

Posted: , by Nick T.

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Second-hand iPhone market going strong, Apple and carriers don't mind
Here is a question for you, iPhone owners: after buying your iPhone, what did you do with your old handset? If you simply gave it away to a friend or relative, then you are among the majority. In fact, nearly two thirds of used phones end up as gifts, according to a recent study conducted by Consumer Intelligence Research Partners (CIRP).

The study also reveals that after the iPhone 4S was released, 53 percent of the people who bought it introduced their previous phone to the second-hand market by either giving it away or selling it. And as much as 49 percent of those phones were previous iPhone models (probably even ones with broken displays), while BlackBerries and Android smartphones account for only 21 and 15 percent respectively.

Here is how CIRP co-founder Mike Levin explains why the second-hand iPhone market is flourishing:

“We think the secondary market for the iPhone is more established, since iPhone has the longest track record for a single device/platform, and for many it is the aspirational entry-point smartphone,... iPhones also had the advantage of having a useful second life as iPod touch substitutes, which made their used value a little clearer from the start. As a GSM phone, AT&T iPhones also could be [unlocked] for use on other GSM networks, so there was an early secondary market for iPhones on other carriers — though this was, of course, limited to more savvy and aggressive technology consumers.”

Second-hand iPhone market going strong, Apple and carriers don't mind
And yes, the majority of those used iPhones do get activated on a wireless carrier – as much as 87 percent of them. It is even estimated that 11 and 12 percent out of AT&T and Verizon iPhones in use respectively are, in fact, second-hand devices. This phenomenon is actually quite beneficial to carriers as they do not need to pay subsidy for those devices, which is an estimated $400 per iPhone. After putting these numbers into perspective, CIRP concludes that AT&T and Verizon may have saved between $400 and $800 million so far.

Second-hand iPhone market going strong, Apple and carriers don't mind
But what about Apple? Well, the company that gave us the iPhone may be losing money because people buy used units instead of new ones, but there is a bright side to that as well. First of all, those users do consume content and purchase software on those iPhones, so Apple is still making money from them. Additionally, owning a second-hand iPhone is very likely to motivate one to purchase the latest model once it hits the market. It is good for brand loyalty too! In a nutshell, the benefits for Apple outnumber the drawbacks.

How many of you would gladly use a second-hand iPhone if it was given as a gift to you? And what about buying a used one? Feel free to share your thoughts with us in the comments below.

source: CIRP via AllThingsD

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10 Comments
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posted on 18 Jan 2012, 06:13 6

1. andro. (Posts: 1960; Member since: 16 Sep 2011)


One problem with this is that apple only give a measly one year warranty with the iphone where as even your basic bottom of the barrel cheap phones have 2 years. Therefore most people buying a second hand iphone are buying a phone with no warranty and from what my experience in the phone industry retailing has thought me iphones have a very inherent trait for going faulty quite soon after the warranty is up,most common faults after one year is menu button getting stuck or things like phone freezing or gone blank after software update through itunes to name just two.

The second hand market though is indeed flooded with second hand iphones as when a 'new' iphone is released apple trigger a switch in ifans head compelling them to buy the new iphone immediately despite it being the exact same as last years model but now with something like siri.

posted on 18 Jan 2012, 08:32 5

3. bigdawg23 (Posts: 385; Member since: 25 May 2011)


I have never had a Windows, Blackberry or Android phone that have more than a 1 year warranty. However with most carriers, when you add insurance your warranty becomes two years.

If you don't have insurance on your phone line all used devices are a gamble.

As for the second market on iPhones, you by far get the highest value. I sold my iPhone 4 for $400. It went in 24 hours. I could have asked $450 and gotten it.

posted on 18 Jan 2012, 08:54 3

4. andro. (Posts: 1960; Member since: 16 Sep 2011)


Everyone phone in uk & Ireland and Europe in fact must have a 2 year warranty by law. Apple has recently been sued in Italy for only having a one year warranty and then trying to get iphone users to cough up huge amounts for a second year warranty.

It happens on a daily basis in mobile retail people coming into store with an faulty iphone,its just over the one year warranty,no insurance and they are in an 18 or 24 month contract so are a long way off an upgrade.

posted on 18 Jan 2012, 07:41 4

2. danwatson (Posts: 102; Member since: 03 Jan 2012)


The problem with used android phones is that manufactures generally abandon the phones after 1 year, refusing to update and provide accessories. Apple phones are generally updated for up to 3 years with a flooded accessory market even for a 2 year old phone.

posted on 18 Jan 2012, 11:54 1

6. Orbitman (Posts: 110; Member since: 09 Oct 2011)


with all of the iphones looking about the same and being about the same size, i don't think you could call it a "flooded" accessory market, seeing as most of the accessories will probably fit most of the versions of the iphones, right?

posted on 18 Jan 2012, 10:37

5. bloodline (Posts: 693; Member since: 01 Dec 2011)


a friend of mine had to take his iphone 4 to the store 3 times for repairs, hardware and software.

His buying an android later in the year now.

Serious and true story!

posted on 18 Jan 2012, 12:32 2

7. bigboy029 (Posts: 74; Member since: 03 Jan 2011)


cool! oh wait.... how does this relate to the article?

posted on 18 Jan 2012, 14:19 3

8. Mr.Cool2012 (Posts: 1; Member since: 18 Jan 2012)


Cool story bro. I had waffles for breakfast. With Canadian maple syrup. Made my morning.

posted on 18 Jan 2012, 16:21 2

10. m.garz (Posts: 61; Member since: 08 Oct 2010)


epic fail

posted on 18 Jan 2012, 16:21

9. m.garz (Posts: 61; Member since: 08 Oct 2010)


aww.. wrong post

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