News Column

What to Do With Your Used iPhone

September 24, 2013

Ian Hamilton, The Orange County Register

iphone 4
So, what to do with that old iPhone?

Sept. 24--The people who lined up for hours Friday to buy a new iPhone, even though it could be ordered online, may not value their time the same way others do. But they have a pretty good handle on the value of their phones.

Laguna Niguel residents Blair and Elisa Burkhardt arrived well after 1 a.m. Friday morning at the Irvine Spectrum to snag a spot in line for Apple's new thumbprint-sensing iPhone 5S at $300, under a two-year wireless contract. Meanwhile, a Craigslist advertisement listing their current phones, both 2-year-old iPhone 4S's, is generating email offers of around $320.

"It breaks even," said Blair Burkhardt.

Craigslist is just one way to go. Phone owners can take advantage of various programs that offer cash or store credit at Best Buy, GameStop, Walmart or the various wireless carriers' stores. Websites such as Gazelle or uSell will send you an envelope or box to mail in a device. Those services are less picky than retailers about accepting damaged devices.

Apple is offering up to $325 in store credit for an entry-level iPhone 5 through a recycling program on its website. Microsoft recently started offering store credit, starting at $200, for turning in an iPad.

Then there's ecoATM, a San Diego company that was purchased for $350 million in July by Outerwall, the company behind the Redbox and Coinstar kiosks. EcoATM has 10 kiosks at Orange County malls that will take a gadget and spit out cash. It's testing the kiosks at Ralphs stores in San Diego.

The booming competition among Apple, Samsung and others to launch ever-more-capable smartphones creates a robust supply of slightly older phones -- and tablets -- for those lower on the price curve.

More than half of U.S. adults now operate a smartphone, according to a Pew Research Center survey from June. Many used phones wind up overseas, in countries where new devices are less affordable.

The trick for phone users in Orange County and elsewhere in the U.S. is to find the right price with the least effort.

Apple devices tend to have a higher trade-in value. That reflects Apple's less fragmented platform -- new devices only launch once a year, and some older phones can be updated over-the-air with new software features. Apple said Monday that after less than a week its latest operating system, iOS7, was running on 200 million devices worldwide.

"I've never once handed down an old PC," said Andy Fathollahi, CEO of Irvine-based phone accessory maker Incipio, in line with his team at the Irvine Spectrum to purchase more than 20 iPhones on Friday. "But not one Apple device I've thrown away."

Nik Ramen, the founder and chief operating officer of uSell -- a New York company that has paid out $10 million to customers for more than 200,000 devices -- said an iPhone depreciates at a rate of about 5 percent per month, while an Android's rate is about 10 percent. A Samsung Galaxy S4 can garner $240 on the site, while a comparable iPhone 5 goes for about $300, he said.

"They've got to think of their phone like a car. It starts depreciating as soon as you drive it off the lot," Ramen said. "As soon as you get a new one, you should trade the old one in. Think of it as a way to subsidize the new device."

EcoATM will pay up to about $300 cash for the highest-value gadget, which would usually be the newest iPhone with the greatest amount of storage. The machine uses cameras to identify the device and inspect its condition. The first of these kiosks in Orange County was installed at The Shops at Mission Viejo in January 2011. Since then, the company says, its 10 kiosks here have taken in nearly 50,000 devices. The company added a second kiosk at The Shops and has two each at the Westminster Mall and Westfield MainPlace in Santa Ana.

"We can see cracks or missing buttons or dents," said Ryan Kuder, ecoATM's director of marketing. Devices are either broken down and recycled or sold to resellers. The ecoATM has the original owner connect the appropriate cable for an electrical inspection of the phone, to "check that it turns on, the screen is in good shape, and verify the particular make and model of the phone."

The Burkhardts' first iPhones sold $200 above the purchase price of a new one when they put them up on eBay and buyers in Europe won the bidding.

The iPhone 4S's the couple are now parting with first went on sale in October 2011. Even though Apple has released three new models since then, it can run iOS7 and is being sold by Apple for free when it comes with a two-year contract, or $450 without. So two years later, an owner can still sell his used iPhone 4S on Craigslist for $100 less than a new one.

"It always covers the cost of our phone," said Elisa Burkhardt.

Contact the writer: 949-229-2426 or ihamilton@ocregister.com

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(c)2013 The Orange County Register (Santa Ana, Calif.)

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Original headline: Plenty of options for that used iPhone


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Source: (c)2013 The Orange County Register (Santa Ana, Calif.)


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