Expect the usual buying frenzy when Apple, as rumored, introduces two iPhone models at an "event" scheduled for Sept. 10.
Another Apple-inspired frenzy, coincident with any new-model expectations, has already begun: the unceremonious dumping of older iPhones by owners anticipating an upgrade.
"Get rid of it early," says Nik Ramon, chief operating officer of uSell.com, an online market place where sellers can solicit bids on their electronics from a half-dozen wholesalers and refurbishers. "Prices only go in one direction. Over time, it's like a car. As a rule of thumb, we've calculated that the iPhone depreciates 5 percent a month. An Android depreciates more like 10 percent per month. At the time of an announcement, that accelerates."
According to uSell.com research, prospective iPhone sellers should expect the value of their device to drop 5 percent one week after the new iPhone launch. After two weeks, the value of older iPhones drops 12 percent. By the third and fourth week, older iPhones are worth as much as 20 percent less.
Locking into a sales price for a used iPhone before the new models are announced will give any seller an advantage over the procrastinator who waits three weeks or more after the announcement.
Here's how much more a seller could get by dumping a phone before the announcement, according to uSell.com:
>> iPhone 5: $72
>> iPhone 4S: $46
>> iPhone 4: $29.
The Bottom Line last week performed a spot-check at several sites to find the highest bidder for a good-condition iPhone 4S with 16-gigabyte storage and Verizon cellular service.
The top three:
1. Glyde.com: $200.92 "out the door," after fees.
2. Gazelle.com: $190
3. Amazon.com: $188.50.
The uSell vendors:
1. Technollo.com: $155
2. Givebackwireless.com: $138
3. Guzu.com: $130
4. TheWirelessWarehouse.net and SellYourCell.com : $125
5. BuyMyTronics.com: $101
A recent study by Bernstein Research analyst Toni Sacconaghi predicts a huge increase in the used-phone market, from 53 million phones this year to as many as 257 million transactions by 2017.
"We absolutely see that coming," says Raman. "Right now, it's still a nascent industry where most people still don't sell their phone for cash. . . . As the pace of smartphone innovation decreases, the used market will become more and more powerful."
Any iPhone has value. Most used phones qualify as good condition, with normal wear but no serious flaws. A used phone in flawless condition is like new, just out of the box.
Never throw away a phone because of cracked or damaged screen. Glyde.com, which would pay $200.92 for TBL's good-condition iPhone 4S, would still pay $70 if the screen were cracked. Gazelle would pay $80. TheWirelessWarehouse.net would pay $100.
"It seems like a crazy number," says Raman, "but what happens is the buyers on uSell are professional refurbishers and wholesalers. They'll replace the screen and sell to a foreign wholesaler, maybe in Hong Kong."
The next high-test iPhone, the 5S, should get most of the attention on Sept. 10. A cheaper model, rumored as the 5c, would replace the iPhone 4/4S.
The hottest iPhones on the used market this fall probably won't be the 5. More people will be upgrading from slightly older phones, the 4S.
"Right now," says Raman, "the top-selling phone on uSell is the iPhone 4, 16 gigabyte. After the 5S [announcement], we imagine the 4S will be the biggest-selling phone. We're kind of two years behind the forward-selling market. As Apple is introducing a new model, we're two generations back. That's our biggest moneymaker."