Another insane Apple advantage

“Even while Apple smashes yet another sales record with the iPhone, the doubts still linger,” Paulo Santos writes for Seeking Alpha. “Design quality is subjective. And comparing specs does not capture everything that a smartphone is.”

“Yet Apple enjoys another advantage regarding which few if any talk about. An advantage forged over the years, and which some other prestige non-smartphone brands also enjoy… it infuses Apple with a tremendous ability to retain its giant margins,” Santos writes. “I can describe Apple’s insane advantage with just two words: Resale value. Apple’s products have extremely high resale value. And this produces a situation that’s likely even more mechanical than its ecosystem in attracting and retaining customers.”

“Take for instance the iPhone 4S. Someone might have bought an iPhone 4S two years ago on a 2-year contract. He would have paid $199. Now, 2 years down the road and with the iPhone 5S in the market, this phone would be free of the contract obligation. The customer could thus sell it and use the proceeds towards buying the new iPhone 5S also at a subsidized $199 price. How much would the customer get for it? According to, which put together a table of the resulting resale values, he could get anywhere from $205 to $253, and this from at least 6 different entities, some of which would even buy back the phone for cash. Indeed, he probably would be able to get even more, if he decided to try and sell it through Ebay or Amazon,” Santos writes. “This resale value is something that’s pretty rare in electronics, and especially rare in smartphones. Take for instance the Galaxy Nexus, a phone launched 2 months later than the iPhone 4S. Gazelle also lists it as something it rebuys. But the price it quotes? $40.”

Much more in the full article here.


    1. Who?

      We customers have understood this for many years with Apple laptops. It is not unusual to see an Apple laptop happily working 8 years on. I have a few as spares for accessing ‘old’ programs.

        1. Thats why samsung had to send its clueless camera crew to the new york fifth avenue apple store line for the 5s to try and figure out why all these people stand in line.
          They just dont get it and never will quality will always be worth more than quantity. The old saying goes “no matter how much you polish a turd (or in this case a samsung phone) its still a turd”.

      1. It’s true. We never re-sell our Apple stuff, but we see that extra value in an extended product life. You can use the gear a year or two (or more) longer, and you can still hand it down when you’re done.

      2. I still use my 2006 first gen Intel MacBook Pro every night. Runs flawlessly, only have replaced the battery. About 2 years ago it got wet from sitting in an undiscovered water puddle on the counter. It would not start, nothing. 2 weeks I waited, tried starting, nothing. After feeling rather bummed about my old friend’s unfortunate demise, I started saving for a new one. Then for the heck of it, just over a month after the accident, I decided to give it one more try. It started, I immediately backed it up one last time (not expecting this surprise resurrection to last) but—it’s run flawlessly every day ever since.

        I usually keep my iMac’s about 4 or 5 years, then sell it cheap, to someone who couldn’t decide if they dared try a Mac and ditch their PC (they never return to a PC’s). I’ve even my iMacs away to PC users who just don’t have the money for a new computer. The funny thing I always hear is “This old Mac runs faster than the PC I was using that was newer!” I do usually buy mine loaded to the teeth in RAM and processor speed, graphics cards, etc. to give it longevity just in case at some point I won’t be able to afford a new one for myself.

    2. Yes, he does get it. For a subsidized phone under a standard 2-yr contract which does not decrease one’s monthly service charge after the subsidy is paid off, holding on to the phone longer than 2 years means overpaying for it. It’s smart to sell it and upgrade.

    1. $40? Yes, that was my first thoughts on an old Android turd. The OS never was up to date and now, it is 2 years later. Are the people spending $40 for the power cord or the battery? Maybe they want to hack your credit card information using your old Android phone.

    1. It IS an internet communicator, and in addition the iPhone really IS a small portable computer. The fandroid people don’t really get that. It is strange that the fandroids and windroids tout tech specs and do NOT use them for what the tech specs supposedly support – because it doesn’t do it well enough!

      Pre-iPhone, smart phones had a browser and tech people touted that, but no one used it for that except rarely. Another area where tech people prefer specs over function.

      NO, They don’t get it!
      And they don’t get the resale value, they think it is a fanboy addiction.

  1. When moving from iPhone 4 32gb to iPhone 4S 64gb, I sold the 4 for all upfront costs plus 2 months line rental. I also went through a cashback website and got another 5 months rental back.

    Same is also true of iMacs, MacBook Pros and even older Apple computers. I sold my 7 year old iBook G4 14 inch 1.42Ghz last year for only £150 ($90) less than I paid for it!!! All that I had spent on it was one OS update and a new power brick. The amount I sold it for was still higher than new WinTel machines.

  2. Wall Street would definitely see a longer-lasting product as a negative thing. The longer a consumer holds onto a product it means there’s less turnover to a newer product. Wall Street would always want more disposable-type products because it means a high rate of turnover and a greater rate of sales. Wall Street would hate the idea of a smartphone becoming an appliance like a refrigerator or toaster that might be kept around and used for many years. To Wall Street, high turnover means everything. They go giddy hoping consumers change their smartphones every year or less, if possible.

    The ultimate Wall Street smartphone would have a large display, made from very cheap materials and have a sealed battery you can’t recharge more than a few times so you’d have to throw the smartphone away and buy another one every month. Since everyone would be able to afford one, a company could get tens of millions of unit sales every month. Sure, it might be a waste of materials but Wall Street doesn’t care about things like that.

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