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Other Increasing depreciation

flopticalcube

flopticalcube

macrumors G4
Original poster
Sep 7, 2006
10,478
225
In the velcro closure of America's Hat
I have noticed an increase in depreciation rates over the last 5 or 6 models. More recent models depreciate at a faster rate than older ones at the same stage in their life. I wonder if this is just a natural consequence of higher prices and market saturation. The upper tier version like Pro or Pro Max appear to have slightly lower depreciation rates than the base models, probably because of their more "professional" designation. Surprisingly, Pro and Pro Max make up the bulk of the latest production, which I find surprising.
 
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Depreciation is based on how much one is willing to pay for a used phone and how much one is willing to part ways.
 
The market sets the baseline. It is up to individuals (the highest bidder or lowest bidder) who are willing or not willing to pay more or less that dictates the market.
 
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TKSX said:
The market sets the baseline. It is up to individuals (the highest bidder or lowest bidder) who are willing or not willing to pay more or less that dictates the market.
Click to expand...
So you feel that more recent sellers are willing to take bigger hits than previously? We are talking about highly liquid markets with millions of phones here. There is a common trend of deepening discounts. At current rates, the iPhone 16 will probably have a 60% or more depreciation rate by the time the 17 rolls out. The 15 dropped about 56% on average in its first year.
 
I think it all boils down to basic economics: namely demand and scarcity, if anything mini's have appreciated because many people still want them. I have a Kindle Oasis that also appreciated because Amazon no longer makes those.
 
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Definitely oversaturation. Once they started the 4 models on launch PLUS still having old models available, you have more choice and then repeat next year. In my opinion they should start doing 2 year release cycles and focus on the software. Every new iPhone or Android release is so buggy now. Why dont they care? Because people will buy it regardless.
 
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And it is also interesting because they last longer. They get more iOS updates, and more importantly, they work better when updated. Three years after launch, an iPhone 5c was utter garbage to use on iOS 10, and would be unsupported soon. Three years after launch, an iPhone 13 is still great. So it makes no sense if you take this into account.

It does make sense in terms of market saturation, and I think that’s the reason. Too many phones, too many models, too many brands, and from each brand, too many SKUs.
 
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With a new iPhone every year and more people trading in iPhones that are barely a year old, carriers are dumping those phones on the used market at quite well below their actual market value. The carriers have, IMO, devalued the price of the iPhone on the used market.

Before the carriers started so aggressively mining for iPhones with these now yearly trade up plans, most of the used iPhones on the market were from peer to peer sale.

Those days are over. You are basically seeing in real time how a market can artificially be devalued at the, and to the benefit, of the carriers and even Apple themselves. The winners in this are the carriers. They make a nice 15-25% margin on people with the yearly trade up programs, then on top of that they are basically turning around and reselling that traded in iPhone at almost pure profit. Yes they get less than the iPhone is actually worth, but it's easy money for the carriers nonetheless.
 
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digimc said:
With a new iPhone every year and more people trading in iPhones that are barely a year old, carriers are dumping those phones on the used market at quite well below their actual market value. The carriers have, IMO, devalued the price of the iPhone on the used market.

Before the carriers started so aggressively mining for iPhones with these now yearly trade up plans, most of the used iPhones on the market were from peer to peer sale.

Those days are over. You are basically seeing in real time how a market can artificially be devalued at the, and to the benefit, of the carriers and even Apple themselves. The winners in this are the carriers. They make a nice 15-25% margin on people with the yearly trade up programs, then on top of that they are basically turning around and reselling that traded in iPhone at almost pure profit. Yes they get less than the iPhone is actually worth, but it's easy money for the carriers nonetheless.
Click to expand...

All true, but it also sounds like a system that creates a lot of unnecessary e-waste.

🙁
 
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digimc said:
With a new iPhone every year and more people trading in iPhones that are barely a year old, carriers are dumping those phones on the used market at quite well below their actual market value. The carriers have, IMO, devalued the price of the iPhone on the used market.

Before the carriers started so aggressively mining for iPhones with these now yearly trade up plans, most of the used iPhones on the market were from peer to peer sale.

Those days are over. You are basically seeing in real time how a market can artificially be devalued at the, and to the benefit, of the carriers and even Apple themselves. The winners in this are the carriers. They make a nice 15-25% margin on people with the yearly trade up programs, then on top of that they are basically turning around and reselling that traded in iPhone at almost pure profit. Yes they get less than the iPhone is actually worth, but it's easy money for the carriers nonetheless.
Click to expand...
A friend that worked in phone sales once told me a lot of the trades end up in 2nd/3rd world overseas markets; places where they are more than happy to just have an iPhone.
Trader05 said:
Because people will buy it regardless.
Click to expand...
Guilty <looks over at phone graveyard....20 phones and counting would be a rough estimate>
 
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flopticalcube said:
So you feel that more recent sellers are willing to take bigger hits than previously? We are talking about highly liquid markets with millions of phones here. There is a common trend of deepening discounts. At current rates, the iPhone 16 will probably have a 60% or more depreciation rate by the time the 17 rolls out. The 15 dropped about 56% on average in its first year.
Click to expand...
It's actually very simple.
  • Don't agree with the trade in value? then don't trade it in and keep the phone.
  • Don't agree when the buyer is low-balling the value in your phone? Then sell it to somebody else who is willing to pay top dollar for your phone.
It's very simple indeed.
 
TKSX said:
It's actually very simple.
  • Don't agree with the trade in value? then don't trade it in and keep the phone.
  • Don't agree when the buyer is low-balling the value in your phone? Then sell it to somebody else who is willing to pay top dollar for your phone.
It's very simple indeed.
Click to expand...
What if nobody pays you what YOU think it is worth? Technology has an ever decreasing time-value.
 
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