Why the iPhone 5 Will Sell No Matter What
Because iPhones retain value, owners often sell them to buy the latest model.
"We realized, with Apple products, people are going to buy. People are going to trade in their old one and buy a new one," said Anthony Scarsella, who has the whimsical title of chief gadget officer at electronics reseller Gazelle.
Gazelle is an online service that buys older electronics, including the range of Apple products and some other popular phone types such as Android and BlackBerry. Three hundred fifty-thousand customers have sold nearly 1 million gadgets using the service, and the site is busiest when a new iPhone emerges and people trade in their old model. (Other companies, such as usell, offer similar services.) "No matter what Apple puts out, year over year, we break our previous records," Scarsella said.
Some people are upgrading to a newer iPhone. Others are buying their first. "We see an uptick in [people selling off] Android devices and BlackBerry devices around iPhone time," he said. "People are dumping them." [What's Your Old Cellphone Worth?]
Scarsella said that Gazelle customers diligently follow Apple news. The company even sees people selling off iPhones before their two-year contract expires. Apple products hold value better than any others, according to Scarsella. People can sell an iPhone for a lot more than the $200 carrier-subsidized price (perhaps twice as much), and they put the money toward buying a new phone at full price. [Can I Get a Smartphone Without a Contract?]
That still costs a lot more than waiting a year to buy a new subsidized phone. But for some customers, having the latest product at the earliest time is worth it.
It's easy to figure out people's interest in iPhones. Apple releases a single model (varying only by color and amount of internal memory) about once a year. If the number of people selling old phones right around the release time spikes, it's pretty likely that people are upgrading to the latest iPhone.
Android devices are harder to judge, said Scarsella, since so many are coming out all the time. But a few are getting a smidgen of the rock star status of iPhones, including the HTC One series and the Samsung Galaxy S III (which just went on sale last week). The latter has been especially big news. And Scarsella said that he would be watching for trade-ins of Galaxy S II models in the coming weeks, to see if people are dumping those older models in order to upgrade. [Americans Like Android Phones More Than the iPhone]
"We still think there is a huge market out there for Android," said Scarsella. "As Android continues to grow, it's certainly something we'll keep our eye on."