iPhone depreciation

Discussion in 'iPhone' started by ravinder08, Sep 30, 2014.

  1. ravinder08 macrumors regular

    Joined:
    Jun 11, 2010
    #1
    Sold my iPhone 4s last week for £140 on ebay.
    I bought the phone unlocked direct from Apple store 3 years ago.
    I lost £310 in total ((£155 per year).

    I know have iPhone 6 again unlocked from Apple no contract.
    I was thinking would it be better to keep this phone for 2-3 years then sell or upgrade each year, selling the phone in August before new one is released?

    Any thoughts would be appreciated
     
  2. 12vElectronics macrumors 68040

    12vElectronics

    Joined:
    Jul 19, 2013
    Location:
    California
    #2
    Everytime I sell my iPhone here, I get my money back and use it for the new iPhone :D
     
  3. ravinder08 thread starter macrumors regular

    Joined:
    Jun 11, 2010
    #3
    Would you upgrade each year rather than every 2 to 3 years? Just wondering If the most money is lost on the phone in the first year.
     
  4. Hal~9000 macrumors 68000

    Hal~9000

    Joined:
    Sep 13, 2014
    #4
    I know a lot of people talk about the 'great resale value of iPhones'... but I'm just not seeing that.

    Just looking on craigslist in my area I see a massive drop from brand new -> 1 year old.

    An iPhone 5s 16gb (retails $650 brand new a year ago) goes for an average of $350 give or take.

    That's roughly a 46% drop in value! :eek:

    Trade-in values through gazelle / carriers are even worse.

    The other sites (ebay / swappa / etc) allow you to easily be scammed by the buyer claiming they received an empty box and paypal siding with the buyer like they normally do.
     
  5. scaredpoet macrumors 604

    scaredpoet

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    Apr 6, 2007
    #5
    You're not looking in the right places. eBay resale prices are much higher. I just offloaded my unlocked 5s for $500.

    There's a reason for that. Gazelle and most trade-in places are basically turning right around and selling your phone on eBay and similar places. They have to make money, so what they offer you is a percentage lower than what they think they can get on eBay.

    basically, trading in or using Gazelle is the lazy way to get some money back, and you obviously don't get as much for it. If you put in a little elbow grease, you will get more money for your phone.

    Never happened to me, but then I don't sell to scum with bad feedback. There are ways on ebay to limit your exposure to questionable buyers.
     
  6. 12vElectronics macrumors 68040

    12vElectronics

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    California
    #6
    Not when you're selling every 2 years when you paid $199+tax for your phone..
     
  7. Hal~9000 macrumors 68000

    Hal~9000

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    Sep 13, 2014
    #7
    Consider yourself lucky. I don't think eBay sellers can even leave negative feedback for buyers, so scammers can run amok without a trail. Of course sellers can try to limit your exposure to scammers, but nothing is foolproof and you are always at risk of losing your device for nothing.

    Typical credit card 0%-down mindset.

    Even if you only paid $199 down you basically paid the full $650 (or more) through your higher monthly payments than if you paid the $650 upfront and went with a cheaper plan. Trying to rationalize a 46% drop in value by saying "well I only paid X number upfront" doesn't really make the drop in value any less.
     
  8. scaredpoet macrumors 604

    scaredpoet

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    Apr 6, 2007
    #8
    You can also get mugged and ripped off on craigslist. Everything has risk. Want 0 risk? Send your phone in to Gazelle and get less cash for it.


    What I'm wondering is, why are we viewing smartphones as investment vehicles all of a sudden? These are phones, first and foremost: tools to get work done, or devices of amusement, or something in between depending on who uses it. I purchase my phone with the notion that the intrinsic value of using the phone, and it enabling me to do certain things quicker, or that I wouldn't be able to do easily otherwise, more than offsets whatever money I paid for it.

    If, when it's time to upgrade, I'm able to get some cash for it, that is a nice windfall, but nothing that I depend on when purchasing something else.

    If you are depending on income from a resale to subsidize your upgrade, you shouldn't be upgrading. You should instead be looking at your income and spending choices to improve your situation, so that you can be in a position where you can make the purchase and not sweat which source gives you the most cash for your phone, or who might screw you and who won't.

    If you want a return on investment, put some cash together and invest it with a financial advisor with a good track record. But if you want to use a phone, find the model and style that works for you, and buy it.
     
  9. Hal~9000 macrumors 68000

    Hal~9000

    Joined:
    Sep 13, 2014
    #9
    Not a realistic comparison.

    Craigslist is much easier to control not getting ripped off. Don't want to get mugged? Do the transaction in a public place. Don't want to get ripped off? Meet at a carrier store to make sure the phone isn't on a payment plan and that it's not stolen.

    Getting scammed by an anonymous stranger online via eBay that can do whatever they want is a much more likely since once you send the product in the mail you have zero control over the transaction.

    It's not about an investment, these aren't stocks like you said, its about minimizing cost and reducing losses. The iPhone has become more and more of a loss leader for consumers looking to do the same ole' sell and upgrade plan (hence why I brought up my original point of a 46% drop in value to illustrate it).
     
  10. pickaxe macrumors 6502a

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    Nov 29, 2012
    #10
    Let me guess - you think your phone actually costs 199$.
     
  11. CEmajr macrumors 601

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    Dec 18, 2012
    Location:
    Charlotte, NC
    #11
    It has high resale value relative to other phones that are a year old. For comparison the Galaxy S4 and HTC One M7 were down to the $200s in resale value once their replacements came out.

    If your iPhone 5S is unlocked then it trends closer to $400+. But I'm not sure exactly how amazing you expected to sell your 5S for. Remember Apple dropped the price to $550 brand new unlocked now. $350-400 is expected for a used one.

    Gazelle and the carriers are taking your phone in order to resale it themselves. They have to lowball you in order to make money off the phone. eBay and Craigslist put you in position to sell directly to your buyer so if you put in the work then you'll get more. Give it to Gazelle or the carriers for less if feeling lazy.
     
  12. scaredpoet macrumors 604

    scaredpoet

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    Apr 6, 2007
    #12
    these measures are just as effective as measures to mitigate risk on eBay. they 8Usually* work, but can be ineffective, too. It's a complete fallacy to think that one is more secure or less risky than the other. People can still be discretely lured and mugged even in public places, even shot. And having a stolen iPhone come up clean on a carrier blacklist is a matter of timing, as is selling an iPhone that the original account holder is about to turn deadbeat.


    So why are you applying investment strategies and looking at valuations at iPhones if that's not your goal? You can deny it all you want, but you if you're putting money into an item and expecting front he outset to try and recoup some cash at a later time, you are looking at it as an investment vehicle, and that's a bad strategy.

    Again, if you're looking at your iPhone and wondering how many dollars you're going to get from it later, then there is no point in buying the phone at all. Put the money in a real investment vehicle, and then when you get a return on that investment later, you can then sink the cash into whatever gadget you want, knowing you've already got a return on your money.

    More investment jargon. I find it ironic that you berate another user on here for their credit card mentality, and in the same breath you're espousing a strategy where a your phone upgrade cycle hinges on how much you'll get for it later. The logic is just as poor as going into credit card debt.

    The sound, logical thing to do is to purchase the phone SOLELY because you have the means AND can justify the intrinsic value of using the phone as being worth its purchase price. If you cannot do this, then the "investment" is unwise, because the entire time you're owning the phone, you will be stressing over what actions and events might "devalue" it. And that in itself will devalue the utility and enjoyment you get from it while actually owning it.
     
  13. shaunmed macrumors regular

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    Jun 26, 2010
  14. pdxmatts macrumors 65816

    pdxmatts

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    Jan 12, 2013
    Location:
    Portland, OR
    #14
    Why didn't you just trade in the phone for the i6 $200 promotion?
     
  15. 12vElectronics macrumors 68040

    12vElectronics

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    California
    #15
    Yes. It cost $199+tax. Regardless of carrier.
     
  16. Hal~9000 macrumors 68000

    Hal~9000

    Joined:
    Sep 13, 2014
    #16
    That's your opinion, not mine. We can simply agree to disagree though.

    So you think if you google search 'mall mugging' and 'mall shooting' that makes your point? I can just as easily insert 'eBay scams' and 'paypal scams' if you want me to :rolleyes:

    'Investment Strategies' vs 'Reducing Cost'

    You say toma'e'toe, I say toma'h'toe.

    Really don't care what you want to call it.

    It's not hard to understand, you don't buy a phone (or car or whatever) to use it as an investment. You ALREADY KNOW before buying it's going to drop in value. The main point is that you want to try and reduce the amount it costs you.

    Putting my money or a stock portfolio won't make phone calls for me.

    People can buy depreciating things which help them in their daily lives and still look to not try and have as heavy a loss when selling as expected.

    Again, I don't care what you call it. The principles are the same and universal regardless if it's an investment banker or a 6-year old selling his trading cards. Cool use of 'jargon' though.

    Very twisted logic :confused:

    The guy said you won't lose money selling the phone for $350 since you bought it for $199. I simply corrected by letting him know even if he paid $199 upfront the phone still cost him much more than that over the life of the contract. Also who said anything about a 'hinges'? Only you it seems. I simply like to reduce the amount of $ it costs me to upgrading->selling->and upgrading again.

    Not everyone feels the same way.

    Hmmm maybe this will help you understand what an investment is...
    http://dictionary.reference.com/browse/investment
    Again, the phone isn't an investment. People aren't looking to make a profit on it and know going into the transaction that the thing is going to drop in value (they just weren't expecting as much as the iPhone has!).

    Yes... people can buy things which help with their daily lives and try to keep them nice so that when they sell they get higher value for them.
     
  17. hipnetic macrumors 6502a

    Joined:
    Oct 5, 2010
    #17
    You're misusing the term "investment" which is why he disagreed with you earlier. An investment is where you're hoping your money will *appreciate* in value. No one here is buying an iPhone and expecting it to have *appreciated* after being used for a year. What we're talking about is total cost of ownership (TCO) and minimizing *depreciation*. You can call that an "investment strategy" if you want, but I believe you are misusing the term. In any case, I'm not sure why you're being so argumentative about the subject.

    To the OP's point: I think there was a time when a year-old unlocked iPhone would net you quite a bit more in value than it currently does. I think that's because the iPhone is no longer the only decent smartphone out there, and because we're seeing more deals on new iPhones than we used to. Apple and its partners disguise it, but the discounts on new phones are there. For example: AT&T has supposedly moved away from subsidized pricing, yet they're offering $100 discounts when you start up a new Next contract. Two years ago when I got my iPhone 5 there were promos that several retailers were offering which gave $50 gift cards, etc. Apple still seems to want to keep the "official" starting price of a new iPhone at that $199 (with contract, or $650 without) price, but with the other promos being offered, the true price is a bit less. All of that contributes to the resale values on used phones going down.
     
  18. Hal~9000 macrumors 68000

    Hal~9000

    Joined:
    Sep 13, 2014
    #18
    This^

    And thank you :)

    Agreed.

    Due to the popularity of smartphones now (and the influx of used ones being sold), along with Android options being very nice as well, you don't quite get what you used to on iPhones.

    Like you said though nowadays there are more sales and gift cards given on iPhones so it's something to take into account in how the resale game has changed a little bit.
     
  19. Stetrain macrumors 68040

    Joined:
    Feb 6, 2009
    #19
    They're still better than many other phones in the same price range.

    My mom purchased a Motorola Droid Razr about two years ago. As I recall it was the same $199 with contract as the iPhone. The current gazelle offer is $10 and most eBay listings are under $50.
     
  20. Hal~9000 macrumors 68000

    Hal~9000

    Joined:
    Sep 13, 2014
    #20
    LoL

    $10 is effin' ridiculous :D

    Guess my mindset though when I made my original comment in the thread was compared to the great prices you used to be able to get via Craigslist... whereas now it's so damn flooded with everyone having an iPhone that the resale value has dropped over time. I guess compared to your mom's phone though I should simply be grateful! :eek:
     
  21. Retired Cat macrumors 65816

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    Jun 12, 2013
    #21

    I agree, and I think it makes the most sense to classify an iPhone as a depreciable asset, much like an automobile. It's s tool that one can use to generate income, but by itself it doesn't actually generate a monetary return.

    I bought my iPhone 5 unlocked for $649. The average price in my area for a 16 GB unlocked iPhone 5 is around $250, or a depreciation of more than 61%. Even a phone that holds its value well, like iPhone, depreciates quickly because there's a new model every year. I don't worry too much about depreciation. Whether the device can keep getting iOS updates and continue to function well after a year or two is a much more important consideration for me.
     
  22. ravinder08 thread starter macrumors regular

    Joined:
    Jun 11, 2010
    #22
    So it's better to sell after 2 years than keep any longer?
     
  23. Hal~9000 macrumors 68000

    Hal~9000

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    Sep 13, 2014
    #23
    Well, with any depreciating asset, the longer you keep it the farther down in value it drops. If you upgrade and no longer need the phone then by all means selling it is the correct choice.

    Probably the best time to sell is a few weeks before the new iPhone is unveiled, after that the I woukd assume the phone you have has a drop in value.
     
  24. widestload macrumors regular

    widestload

    Joined:
    Jun 10, 2008
    Location:
    manchester UK
    #24
    I think you have to think of it in terms of total cost with whatever contract you're on.

    Last year on 5S launch day I bought a 64GB for £719 direct from Apple and have had a £15 a month sim only contract for it. Last week I sold it for £430 on Ebay (with a couple of cases so lets say £400 was the phone). Take fees off the £400 and I'm left with £340 in my pocket:

    £719 +
    £15 x12 =
    £899
    - £340 (resale income)
    = £559 (£46.58 a month as a whole cost).

    So either way, when you compare it to the same carriers phone and sim contact I would have been paying a £149 upfront cost and then ~£50 a month (for 2 years not just the one year before I could upgrade).

    If you then think what might have happened if I had kept the 5S for another year... Say I would net £200 in the end for the phone at that point (basing this on what i got for my then two year old 4s a year ago when i sold that).

    £719 +
    £15 x24 =
    £1079
    - £200 (resale income)
    = £879 (£36.63 a month as a whole 2 year cost).

    So whilst I get less for the handset after two years (though based on my experience a lower proportion of the start value is lost in year two than year one) the total monthly cost has reduced by more than 20%. So from that point of view keeping the handset for two years would be better value.

    But it really depends if you're buying the phone outright or on contract (most now seem to be 2 year ones anyway) and how much you want the latest phone each year, (for me its worth the extra monthly cost to sell after a year and get the new phone).
     
  25. sergiobaschi macrumors regular

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    Nov 30, 2012
    Location:
    Gothenburg, Sweden
    #25
    The Apple prices are generally higher in Sweden. The 128 GB iPhone 6 Plus costs US$ 1300 from www.apple.se, and when I sold my iPhone 5 16 GB a month ago, I managed to get US$ 350.
     

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