updated 07:00 pm EDT, Wed August 7, 2013
Oddly, iPhone 4S and 5 also drop slightly in resale value
Analysts at investment firm Piper Jaffray, after monitoring online auctions for Apple and Samsung smartphones, have found that the three-year-old iPhone 4 has actually gained in resale value by just over 10 percent, while the later iPhone 4S and 5 models dropped in resale value -- but nowhere near as much as Samsung's former flagships the Galaxy S III or Galaxy Note II. A similar study conducted in China looking at resale auctions there saw similar results, with the iPhone 4 gaining resale value while newer iPhones and Galaxy products dropped.
As with the US study, the iPhone 4 gained slightly, the newer iPhone products dropped slightly and the Galaxy products plummeted in resale value. The study has been checking online prices for used items since mid-March, looking at the last 50 phones sold to determine the "fair value" for each, reports AppleInsider. In the US study, the iPhone 4S dropped by 11.85 while the iPhone 5 fell just 3.75 percent in value. A possible explanation for the phenomenon is that during part of the period in question, the iPhone 4 was under threat of a possible injunction, which may have pushed up its value in the resale market.
Likewise, deals from carriers touting better offers on plans and overall costs may have pushed down the value of the newer iPhone models on resale. T-Mobile is among the US carriers that are offering no-subsidy contracts that spread the cost of the iPhone out in payments, similar to tactics used in India and China to push sales and lowering the upfront cost of a newer iPhone.
Prices on Ebay for used Samsung phones, specifically the Note II and Galaxy S III, were exceptionally poor. In the US study the Galaxy S III fell 27.32 percent in worth, with the Galaxy Note II losing over a third (35.54 percent) of its resale value. In the China study, which used auction site Taobao the results were similar: the Galaxy S III went down 24.17 percent, the Note II down 23.67 percent, and even Samsung's most recent flagship the Galaxy S4 lost 14.39 percent of its resale value.
Analyst Gene Munster said that the study suggests that there is continuing support for Apple products in China, despite a recent dip in marketshare, with the products retaining "mindshare in the high-end market" which may be key to maintaining desirability in the face of increasing competition. The fact that the iPhone 5 isn't losing much resale value in China may signal that customers are waiting for a new model.
Apple has hinted that it is considering enhancing the value of older iPhones by developing a more national trade-in policy in both countries. Presently, some individual retailers offer such a program, but an official Apple promotion would result in more usable older iPhone models for Apple to refurbish and resell at even lower prices.