By Quentin FottrellWhen Apple makes its long-awaited foray into the iPhone resale market, experts say, it may force rivals like Gazelle to improve their trade-in deals for customers — in the short-term, at least.
Apple AAPL -0.91% reportedly plans to start taking trade-ins. “I like the environmental aspect of it, and so that part of it really is encouraging to me,” CEO Tim Cook said on the company’s most recent earnings call. But Apple has financial reasons for accepting trade-ins as well now. A growing number of iPhone owners use resale sites as a way to subsidize their upgrades — often completely covering the cost of a new phone (with contract) by selling their old one. Now the wireless carriers themselves have introduced their own trade-in services. (A spokesman for Apple declined to comment, as did Brightstar, the mobile-phone distributor said to be working with Apple.) See also: 10 things Apple won’t tell you
Customers should benefit from Apple’s entry into the market, as rivals will likely sweeten their deals, experts say. Apple’s trade-in program will give consumers more options for selling used iPhones, says Louis Ramirez, senior editor at DealNews.com. “It won’t directly affect sites like eBay and Craigslist, but it will force other trade-in sites like Gazelle and Amazon Trade-In to remain competitive,” he says. Although Apple is unlikely to offer customers more than resale sites for used iPhones, “it will be a welcome option for people who don’t have the patience to send gadgets back and forth in the mail,” Ramirez says.
Independent trade-in sites also offer one distinct advantage over retailers and direct sale sites like Craigslist and eBay: They give consumers a grace period between the time they agree to sell their phone and hand it over. For the first time, Gazelle will give consumers 50 days to send in their device if they lock in their price by Sept. 10, with its usual 30-day grace period after that. It offers $350 for a mint condition iPhone 5, and $235 for a 4S. AT&T offers $261 for the iPhone 5 and $175 for the 4S. “Apple will likely fall in line at a competitive rate,” says Scott McLaren, chief marketing officer at ProtectCell, a cellphone insurance company that also buys used phones.
Others are less sure that consumers will see any immediate benefit, however. “A greater supply generally means lower prices that consumers can get for their devices,” says Colin White, managing director of SellCell.com, a resale site for smartphones. But if demand also increases among consumers for used devices, he says that could help trade-in prices for used phones over the long term. Indeed, most industry pros say the resale industry is still in its infancy. “Our market analysis shows that less than 15% of smartphone-owning consumers in the U.S. actually trade-in their phones,” he says.
And with just over 250 Apple stores in the U.S., rivals say Apple’s entry will actually give them much-needed free publicity. Case in point: GameStop, a company that also offers trade-ins for iPhones, has over 4,400 physical stores across the U.S. “This is not a market-share fight,” says Israel Ganot, CEO of Gazelle.com, which buys iPhones and sells them overseas. “It will lift the boat for everyone,” he says, making iPhone trade-ins a mainstream activity for consumers who wouldn’t have considered it before. Also see: Why iPhone repair costs have soared – Yahoo News
