iPhone pre-orders start today, and for a lot of people, that means deciding if you want to spend two years (or more) with a phone you’ve never held. The irony is, if you’re not sure you want to commit for the full two years, then the answer is cut and dry: Get an iPhone. Here’s why.
I’ve been trying to ditch my MacBook Air for an ultrabook for almost a year now. I just can’t do it. Not because of Windows 8 or the laptops running it — those are great — but because I upgrade frequently. In order to do that without living out of a refrigerator box, I re-sell my old laptop to help pay for my new one. And that’s kept me buying Apple stuff, even after it ceded ground in build quality and design, because reselling anything that isn’t Apple is a losing proposition.
It’s been this way for years, of course, and this is the same reason I need a new phone, hate iOS, but hesitate to buy anything but an iPhone.
The thing is, right now, Apple’s no longer the obvious choice. You don’t just go out looking for a new laptop and say, Oh, obviously, MacBook for me, like you did in 2009. Same goes for the iPhone, and to a lesser extent, the iPad. There’s real choice now, real competition, but it doesn’t matter. No one wants to buy anything from you, gently used, unless it’s made by Apple.
This isn’t opinion. It’s fact. We talked with executives from NextWorth and Gazelle, two of the largest sell-it-now, sell-it-easy operations out there, who were kind enough to share some data with us. They agreed: Just buy Apple if you’re looking to get any cash back from your purchase.
By NextWorth’s count, the iPhone 4S and Samsung Galaxy S II — the two premier phones you’d be replacing in this two-year contract cycle on Android or iOS — are separated by a wide margin. The 4S retains more than a third of its original MSRP ($US197 as of September 29), while the S II is down at 13 per cent, which is well ahead of all other Android handsets from that generation.
Meanwhile, you could have sold your old iPhone 5 for a healthy 36 per cent of its initial value, as opposed to just 26 per cent for the Galaxy SIII. These are expensive products, which means those are big gaps, and again, the Samsung phones are the clear leaders of the non-iPhone pack. Everyone else fares much worse. The HTC One, a basically brand new and awesome phone, only gets you $US104 right now.
The individual prices here have shifted in the past few days, following the new iPhone announcement, obviously, but the fundamental calculus will remain in place for the next several product cycles.
Gazelle doesn’t paint a much more flattering picture. In fact, looking across the past few years of data, it’s Apple in a landslide. Check out this graph from earlier this year:
Broken Apple phones actually keep pace with LG’s phones, and are only about $US50 behind HTC. And Gazelle’s current data mirrors what we saw earlier this year, and what Nextworth sees now:
“Not only do Apple products hold their value well, but the demand for them is extremely high,” Anthony Scarsella, Gazelle’s Chief Gadget Officer, told us.
And not by a little. By a lot. “It’s a factor of two,” says NextWorth’s CMO Jeff Trachsel. “Apple products are generally worth about twice as much as other devices at the same period in their lifecycle.”
Even more telling is what neither of the vendors is involved in: Windows PCs and laptops. “One issue around them is obviously they don’t hold as much value as a premium Apple product,” Scarsella says. “There are a lot of different build configurations and models, and have a lower MSRP. And just the demand for those products, there’s a lot more availability overseas, as well as the US.”
Translation: Good luck getting anyone to take that Dell off your hands.
The same goes for categories like Windows 8 tablets (though the Surface is attracting some attention), and until recently, Android tablets, which sell, but are being hindered by their low starting values, which cause a lot of potential buyers to just opt for a brand new device instead.
Why does this happen?
The divide happens for two, maybe two and a half, reasons. First, there are just too damn many of everything but Apple products, and Apple’s done a good job of cultivating a “Buy Apple or Buy Something Else” mentality. That’s the supply part. The other reason, not surprisingly, is demand. Both demand for the entire Apple “half” of that equation, and just as importantly, demand overseas, where Apple products often aren’t as readily available.
If you’ve ever tried to sell your old PC or laptop, you know that first reason to be true. And that’s not because of the quality of hardware anymore (though in the past, that sure didn’t help). It’s the configurations. “More choice is never a bad thing,” you might see shouted on an all caps in an Android or Windows or Linux comments section. Except, that’s extremely not true when it comes to resale.
“Personally, I’ve sold laptops online before. You definitely have a different kind of buyer,” Scarsella says. “Maybe a more tech-savvy buyer who’s looking for something very specific. With all the models out there, you need to know what you have, and understand the value there.” But those buyers are far rarer than the ones who want no part of matching up processor SKUs.
Thankfully, that’s already changing. Android phones have seen a nominal amount of consolidation. There are still a ton of phones and tablets coming out, but most of the premium lines have whittled down to just one “hero” phone. Still, that means HTC competing with Samsung competing with Nokia competing LG for space in humanity’s brain pans, while at the same time competing with lower-priced Android models. This is how a platform like Android wins the market share war, but it’s not a recipe for strong resales.
PCs are in the same bind. All the OEMs like Lenovo and Acer and Samsung and Dell are focusing on premium lines with just a few products. And they’re really damn nice, too. The Acer S7 11-inch is lust-worthy. Ditto the Samsung Series 9, Lenovo Yoga, and Dell XPS 13. The All-in-One lines are getting there too, running basically neck-and-neck with iMacs now. But they’re all still just “Windows laptops” or “Windows desktops” to most folks.
So what should you do?
It’ll take years for this dynamic to change. The design and build from Windows and Android and even Windows Phone OEMs is right there. But public perception can trail five or 10 years, and even then, without a clear winner (like, say, a Microsoft Surface Laptop) they’ll still have to deal with Spam vs. Apple.
For now, I’m waiting on this next generation of computers. The second generation of ultrabooks was such a massive improvement over the first that it feels like this may well be the year that someone just falls out of bed and makes the perfect laptop. But it’ll have to be pretty special to make up for the hundreds of dollars lost to upgrading out of a low-demand piece of hardware. That goes for the phone, too, if I continue to be an idiot and pay full price for a Verizon model to keep an unlimited data plan I don’t even need.
Now, a lot of you might not feel the need to upgrade every year, or even every two years. That’s fair. But just know that for the millions of people who do sell early, Apple’s got a pretty inescapable hook in them.