The iPhone is definitely a hot commodity. It’s no secret that the smartphone is in no small part responsible for Apple’s growing market cap, so we have a good idea what the iPhone is worth to Apple, but what is your iPhone worth to you? It’s a timely question, since Apple’s iPhone refresh is now definitely approaching.
Buy, sell or trade
There are several resellers that are offering cash for iPhones, Apple also has its own Reuse and Recycling program, and RadioShack has a Trade & Save deal. You’ll get less than you paid new for an iPhone when you sell it, since we’re talking about new vs. used goods, but Apple products have historically retained a relatively high percentage of their value over time, as you can see in the chart below.
Selling your current iPhone as a means to fund the purchase of a new iPhone is an option to consider. Despite Apple’s efforts to keep the carriers out of the equation, the driving force behind the deals that accompany any new phone is getting carrier subscribers to sign up for another two years of service. The resulting value gap is great for consumers, as it helps drive up the relative resale value of devices when compared to buying a phone with contract. Basically, people are very willing to pay for freedom from contracts. They may also want to take their iPhone to T-Mobile, as many have already done, despite the lack of 3G support for Apple smartphones on that network.
Early termination fees
But lets face it, the iPhone itself is only part of the cost equation. You also have your existing cellular contract to consider. If you’re looking get rid of your iPhone entirely, or if you just want to switch carriers for the new iPhone, consider the costs associated with terminating your contract early. Both AT&T and Verizon have very similar early termination fees (ETF). Basically $350, less $10 for each month of service that’s already elapsed on your current plan. Below, you can see the breakdown of what the ETF is depending on how much time you have left on your contract.
For some, it actually makes sense to remain behind on iPhone updates, buy used, and stay away from contract renewals, especially if they have grandfathered rate plans. And it is this aftermarket that is helping keep the trade-in market as healthy as it is. So which will it be for you this time around: abstain and strive for a contract-free lifestyle, or give in and commit to another round of cutting edge bliss?