Use your sock drawer for actual socks: Smartphone resale market booms

Apple’s new trade-in program part of a growing resale trend

The next generation iPhones are upon us, in new candy-toned colours, no less. And the millions who will be upgrading to the iPhone 5S and 5C could end up paying less for the latest technology, thanks to a growing boom in the resale market.

Along with the new phones, Apple has recently launched a new iPhone in-store trade-in program. The program will lower the upfront cost of a new phone for people already using an iPhone, and help Apple sell more devices—a key priority amid Android’s ongoing dominance in the U.S. smartphone market.

The new program expands on an already existing online option that offers gift cards for old devices, and it comes as analysts are projecting big growth in the sales of old phones. The research firm Sanford C Bernstein expects the used smartphone market to balloon to 247 million devices over the next five years—it’s now just 53 million. While the smartphone market gets set to reach 1 billion devices this year, much of the growth is being driven by developing nations, where cheaper options than the top-of-the-line iPhones are in demand—and where used smartphone sales are strong. 

Cell phone providers already offer buy-back programs on a range of smartphone handsets, and in the U.S., competition has been heating up, with AT&T, Verizon and T-Mobile recently launching new trade-in deals. In Canada, Wind Mobile has announced its own in-store trade-in program, and in the retail sphere, Wal-Mart is soon to announce its own such program. Only an estimated 15 to 20 per cent of people currently use buyback programs, but some analysts say that figure will grow as companies vie to cash in on the resale market.

It’s all good news for consumers, but the deals generally come with a few hooks: they require you to sign up to a new plan, and buy that new device. Cell phone carriers also determine the price they’ll give you for that old iPhone 3 or Galaxy S.

A new app developed in Canada is seeking to cash in on people who want to buy and sell their old iPhones without those strings. Orchard—expected to launch soon—will run a check-up on your phone, testing what functions still work, and estimate a fair market value price. The app will then create a listing ad you can post on Facebook, Twitter, or on Craigstlist or Kijiji.

Bruno Wong, one of the start-up’s founders, says their price estimate will be considerably higher than what a cell phone carrier would pay.

Meanwhile, Gazelle, one of the biggest online trade-in companies, recently reached its 1 millionth device milestone. A recent company-sponsored survey found that 85 per cent of respondents plan to upgrade when the new iPhones hit stores—45 per cent of them “just have to have the latest and greatest.”

Luckily for them, there are now more ways to cut down on the guilt and cost of keeping up with Joneses, and free up some space for actual socks in the sock drawer.