“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 Appleinsider.com, 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.