Happy iPhone Day, Now Go Sell Your Old One

Kirsten Salyer writes about consumer culture for Bloomberg View and is the site's engagement editor. She has also written for Condé Nast Traveler, Texas Monthly and Houston Community Newspapers. She has a bachelor's degree in journalism and international studies from Northwestern University.
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Today, technology geeks and gadget fashionistas celebrate the expected release of two new Apple iPhones. Tomorrow, the real retail fun begins, as the iPhone 5 is tossed onto the mountainous pile of out-of-date products.

The market for used iPhones is booming. Apple knows it needs to think cheap (it's said to release a cheaper model today), and refurbished older models are already attracting budget-hungry shoppers and buyers in emerging markets as Apple, U.S. phone companies and retailers compete with offers to attract consumers to sell or trade in old phones. Even Wal-Mart joined the game today with a new smartphone trade-in program.

IPhone owners are notorious for their love of the upgrade. According to one survey, almost half of all existing iPhone owners plan to upgrade to the new iPhone immediately after the launch of the new products today.

Yet they're also hoarders. More than half of American consumers have two or more unused cell phones in their homes, according to a February survey from resale website SellCell. Old, unused phones in the U.S. are worth about $34 billion, with $9 billion of that in iPhones. Phone hoarders claim they're too lazy to trade in, too scared of accidentally releasing their personal data, or don't realize that old iPhones are actually worth quite a bit of cash.

Old iPhones can be a good deal for sellers. Gazelle, a Boston-based reseller, offers up to $350 for a flawless iPhone 5 with 64GB. A 16GB iPhone 5 in good shape goes for $315. (The price may decrease after today's launch.)

But if you're looking to buy and are waiting for the price to drop significantly on older models, you may be disappointed. Apple iPhone models retain their value more than Samsung ones, according to a report from investment firm Piper Jaffray. Old iPhones can cost around $300. An iPhone 4S 32GB -- with a cracked screen! -- is going for $310 and has 18 bids on EBay.

So here's a request for anyone with an extra iPhone or two lying abandoned in a drawer somewhere: Get rid of them. Trade them in for the newfangled new toy or sell them for cash. If more old iPhones flooded the market, we could see the resale price drop. It's a win-win: You get a deal, Apple attracts first-time buyers looking for cheaper options, and that old phone gets a new life with someone who doesn't care that it's got the latest fixings.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.