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iPhone resale value myth
- Thread starter dark_knight177
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C'mon folks. We all understand that the retail store has to get as good deal as we would accept - and cover all of their overhead AND their investors' expectations, and the same is true of carriers and handset manufacturers. Yes, that's right, Apple has to make headquarters profitable and each and every retail store. The same is true of the carrier, the network has to support one P&L and each store its own.
This means that smartphones have to be like cars, they need to depreciate quickly. So, in the same way that a used car buyer gets a cheaper deal than a new car buyer, and the new car buyer gets a better deal than a lessee, so it has to be true for smartphones. If you buy a new car and keep it for 5-10 years you get a decent deal. If you want to lease a new one every two years you will pay a premium for the privilege. If you buy a new smartphone every year you are paying a high premium. Not necessarily good or bad, but a choice.
Hat-tip to the book "The millionaire next door." Definitely worth a read.
This means that smartphones have to be like cars, they need to depreciate quickly. So, in the same way that a used car buyer gets a cheaper deal than a new car buyer, and the new car buyer gets a better deal than a lessee, so it has to be true for smartphones. If you buy a new car and keep it for 5-10 years you get a decent deal. If you want to lease a new one every two years you will pay a premium for the privilege. If you buy a new smartphone every year you are paying a high premium. Not necessarily good or bad, but a choice.
Hat-tip to the book "The millionaire next door." Definitely worth a read.
TL;DR for the entire thread, so I'll apologize upfront if I'm duplicating someone else's effort.
That's some awful convenient math to fit your argument. First, looking at recent sales on Swappa, the most recent mint condition 64GB AT&T models sold for $475 and they didn't include Applecare+. You could likely expect to see another $25-50 in price because of that--I did when I sold mine earlier this year. Second, your estimated loss on a Nexus 6P is pure speculation on your part based on absolutely no fact. A better comparison would be to the Nexus 6 released last year, same as your 6+. Including the same tax rate you paid on your iPhone, a 64GB Nexus 6 would cost $747. They're now selling for $300, which equates to a $447 loss or approximately 60%--and that includes no extended warranty. If we remove the Applecare+ from this example to make it an accurate comparison, $909-$450=$459 loss, or a 50% loss.
So, yes, the iPhone is offering a better resale value.
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Obviously you wouldn't get AppleCare+ back. It's just not happening. Secondly, it depends on when you sell the phone. Typically a month to 2 months before the new release is the best time to get max value.
I bought my phone for $499+ tax subsidized and I sold it for $630. So let's say I did buy it full price for $949+ tax. That's only $375 for a year of use... Basically I used the 6 plus for a dollar a day haha.
Realistically, it's an even better deal now with the payment plans. If you are on a plan where you get $25 off your service fee (like I do with Verizon), it's a pretty good deal. Verses a two year contract, I will only pay $15/month extra a month with no money down. That comes out to only $360 (plus tax, but we won't count that here). On a two year contract, I'd be paying $40 a month for the connection fee, plus the $499 up front for the phone. As long as you are on a carrier that give you a decent discount on service if you do a DPP, it's usually a better deal then on contract. It's just people don't run the numbers and see that they are paying an additional $950 over 24 months.
OP, the best way to make the money back on your previous iPhone is well known. Take care of the phone, then 1 month before the new phone is out, sell it. The smaller the phones capacity, the higher the percentage of return. I don't have a need to do this though. I keep my old devices in family, pass them around, and eventually it'll be returned, usually in mint condition, to it's box and rest on a shelf.
A few things to point out.
You can get back the portion of Apple Care you hadn't used, just need to as Apple.
As far as people lying, the trend has gone down. The resale value used to be incredible when Apple limited the carriers and countries they sold their phones in. With plans like Next, Jump, etc. the market has been saturated. You are not wrong in your conclusion that resale values are down. That is why I am so baffled by folks who eagerly point out the money we are "wasting" by getting a new Phone every year on lease. I can net an extra $50 or so selling privately, and this requires me to either t\ship the phone or meet someone in person. The convenience factor alone is worth the $50 IMO, but many make it seem like you are tossing $100's by not selling privately. Subsidized contracted devices are still adecent way to make back your "investment" provided that the contract doesn;t end up making your service exponentially more epxensive.
A better way of looking at phones, for me, is as a service. I pay 25 a month to always have the latest phone. I don't look back at my rate plan at the end of the year to "try and get some money out of it" (partially because I can't). For a person who wants a new phone every year, I suggest looking at the handset the same way. This year I will be buying out my 6s plus, but only because a series of errors had my carrier willing to just credit me 50% of the MSRP of the phone towards my future bills. Essentially they are paying for half the phone. I will keep it and give it to a family member at that price. Or, since I am so damn happy with this phone, I may just keep it another year myself
If you opened a new Discover card this year, you get double cashback which stacks with the 10% Apple Pay promo.
I paid $485 (subsidized 2-yr contract price) for my 6 Plus at release and sold it for $450 a year later. I paid full retail for my 6S Plus ($925) and I figure I'll get about $450 for it in a year which will pay for my subsidized iPhone 7. I'm on a grandfathered Verizon individual plan so I'll continue to take them up on subsidized phones as long as they offer them.
Sold my iPhone 6 16gb for £350 the week after the 6S came out (sim free pristine condition), bought it for £539. That is a loss of £189 over a year.
Unless your iPhone is carrier locked...imo you sold it for far less than it is worth. People over here in the UK care a lot if the phone is sim free.
Your argument contains a few errors.
First you can't factor in apple care, which is optional, and a prorated refund is available.
Secondly, you are basing it off pure $. You can't, you have to base it off a percentage.
Of course you loose more on an iPhone compared to the nexus, there is less room for the nexus price to go down , because it is cheaper to begin with. On a percentage basis, the iPhone holds its value best. The only really viable comparison for your 6 plus would be a note 4. They cost similar initially, yet the note 4 can be bought used for less than $300 (or around that figure). The note lost a higher percentage of its original value, and did so more quickly as well.
Same idea goes for buying a 2010 Honda Accord new vs used. You paid more, compared to other cars brand new, for the name and reputation for reliability; assuming you bought the car brand new. But the second it left the lot, it dropped substantially in price. Yet, 6 years later, it is worth more than a comparable model for a brand like Kia (Kia makes a great car today, but not always). You get the point? The Honda cost more, and you would loose more $ if you sold it two years later compared to the same year Kia sedan. The Honda lost more of its value in $, but less in %.; this is all due to a higher cost and perceived brand value.
Now replace the Honda with an iPhone, and you have a similar situation.
Buying and selling a phone that cost you $1000, after only a year of use, is a poor choice anyway. Even more so on a higher storage capacity model. If you must have the newest gadget, you have to pay the piper, per-say.
All I know is my nexus 6 ain't worth nothing. Android devices loose value a lot quicker. Happens when a new one comes out every few months
This. On Kijijij, iPhones get back a ridiculous amount of value where I live and are constantly being sold/resold. I sold my 64 6+ at the 6s launch for $850. The still regularly go for over $800. I expect to get back the same when I upgrade next year. Alternatively, android phones here sell for pennies. You can easily snag a S6 off Kijijiji right now for $400.
That's your own damn fault for spending 1k on a smart phone.
absolutely agree with you.
To show how my previously postings are right either:
Bought 6 months ago 1x iP5 32GB (purchased just one year ago) + 1x iP5s 32GB (the latter even with some months of apple-warranty) in MINT-asNEW-condition as a bundle offered by a young couple.
(I am living in Europe, so the following prices are in EUR, but comparable in USD concerning our market)
Payed for both altogether 500 EUR.
But what did they have pay?
They were very polite so I had a little talk with them when picking up the iPhones personally.
Neither of them missed something using the 5/5s!
1) It was the wife who wanted the "New iP6" because their friends had already purchased the new ones…
2) The husband told me without shame that he just buyed a new one either "because… why using a less modern iPhone while my wife uses the last model??" (YES, he told me really that as only argument!
)So - they lost an enormous amount of money just to feel like a pride owner… and joined the group of "early adopters".
To ge the two iP6 they had to pay at that time roundabout minimum 900-1,000 EUR plus the 500EUR for reselling the two "old" iPhones. They are not rich at all - just driven by a useless "need to have the latest model"… and to have the "pleasure" of coping with the typical bugs and inconveniences of each new model/IOS put on the market … congratulations!
Regarding the passed two years, they lost even more, because they payed both also high prices for their former iP5(s) !
Altogether astonishing 1,000 for the ip6 plus the difference purchase/reselling the "old" ones (which is minimum 650-750 for both) bottom line: they lost 1,750 EUR just for being member of the "club of the pride early adopters"… I still sake my head about that…. because the two "old" iP5 still work without any problems...
At the same time 6 months ago, a NEW iP 5s 32GB was still in the apple shop for roundabout 550 EUR each and even TODAY other enterprises still sell new ones for 450-490EUR. Because the iP5(s) is well-known as a now-well functioning sturdy phone you can easily put in your pocket and the demand and market for this type is still stable - but only basing on the already dropped price after 1 Year….
Note: every reselling-Statistic shows perfectly a more-or-less asymptotic function: the most important losses in the first year and less and less losses in the following years. If the product is an outstanding and exceptional good and performing/Sturdy one, the asymptotic function will be sooner and more a "nearly horizontally" one…
selling Things in the first 12-24 months after purchase and(or after a follow-up-product arrives on the market will automatically generate the highest losses possible for the reseller.
IF - for some reasons - you have to sell things eventually after 1-2 years my reality-proven advice is: Buy NOT the product of your dreams, but the type of product the most demanded by purchasers. SAying that, purchasing a car means: Buy it with nothing but just the options the most wanted, buy the color the most demanded (NOT the one YOU prefer!) , the motor the most demanded, etc etc etc and so on. This will reduce the losses in reselling to the minimum amount.
Reselling options less demanded means a loss of nearly 100% concerning these "useless" options….
BAck to the iPhones: So - I payed half the price for the same product I could buy as "new" in the shops at that time (you could say: I won 500-600 EUR) - and the price reselling the two iP tomorrow would be exactly the same I payed 6 months ago. There would be nearly ZERO loss.
And they lost 1,500-2000 EUR in less than 2 years!
Even if they lost less by chance, the bottom line is not a good one either...
Prices for contracts with carriers in Europe may be a little bit different from yours in the US, but the clients are preferring more and more contracts without hardware-options because over-all it is the better deal for the clients.
Before I changed my contract I payed at least roundabout 100 EUR more per month for the "One iPhone free per year" option, so 1,200 EUR more/year. Even if I buy a new one in addition per years, I still pay some hundred EUR less than someone with the high-priced " 1 iP for free"-option.
bottom line:
Buying second-hand from early-adopters (the which sometimes surprisingly and tragically don´t even care if they are not at all wealthy enough to be able to afford the big loss of money every year) is the "really best-buy" you can do. And as a further advantage you will NEVER-EVER have all the sometimes enormous problems and tortures of the early adopters with the "banana-type-new-models" (banana-products = hardware/software purchased in immature condition/with initially impaired function and getting mature step-by-step after a long and hard time in the hands of the time- and money-losing clients and multiple "updates" )…
as I told already before, you can apply this market-law on nearly every product - be it Cars, Video/Audio-equipment, or whatever…
It is your personal choice: Either to be money-wasting an "Early adopter" or to be a money-saving "Smart buyer"…
Just my 2 cents...
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