How to get Apple’s newest iPhone for free

“At Apple’s annual event on Wednesday, the media, analysts and consumers will be expecting news on the iPhone, which remains the company’s biggest gadget nearly a decade after its launch,” Quentin Fottrell reports for MarketWatch. “If the company unveils a new version of the iPhone, as expected, millions of Apple fans will ask: ‘Will it be worth selling my old iPhone for the latest model?’ The answer for many is ‘yes,’ even for those who bought an iPhone last year.”

“Once again, resale sites have reported a surge in trade-ins of old iPhones ahead of the announcement,” Fottrell reports. “Though prices offered for trade-ins will start dropping during and after the big day, consumers can still lock in high enough prices to break even — or earn a profit — by trading in their old gadget and upgrading to a new phone.”

“Resale site NextWorth is buying a 16-gigabyte iPhone 6 in excellent condition for $350 and 16GB iPhone 6 Plus for $385; it will buy a 2013 edition iPhone 5S for $178, slightly less than the price of a new iPhone. Resale site Gazelle will offer up to $206 for a 16GB iPhone 5S, says Sarah Welch, chief marketing officer at Gazelle; Gazelle will match the price in cash (plus $1) to the credit offered by Apple or your old carrier on old devices,” Fottrell reports. “A 16GB Verizon iPhone 5S in excellent condition is selling for $217 on Glyde.com, a peer-to-peer selling site, and a 16GB iPhone 6 is selling for $380 while a 16GB iPhone 6 Plus is going for $437.”

Much more in the full article here.

MacDailyNews Take: Out with the old, in with the new!

[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]

7 Comments

  1. Turn a profit? If the phone cost upwards of $600 for the base model, yes more than that. How does that equate to a profit if your old phone, last years model trades in at $350 – $385?

    Now if there is no subsidy, this is even exasperated in that you do not have $400 of your carrier’s upfront expense to make up the difference.

    Am I seeing this wrong? Do we still have the subsidy or not?

    1. No subsidy through apple.com, but att.com still offers the subsidy. I already did a dry run purchase of an iPhone 6 Plus on both sites, and spoke with sales associates from both companies in preparation.

      However, since I just used my subsidy last year, it still makes more sense for me to pay full price for an iPhone through apple.com because I also have a ton of balance on my Apple Store gift card.

      Last year when I attempted to use my apple rewards Barclay card for the iPhone, they blocked the charge as suspected fraud and it cost me weeks of delay, so for the watch I bought a $1099 Apple Store gift card (no sales tax in Delaware). But because they delayed the 42mm space gray apple watch with the link band until June or July, I decided to just go with the $699 Apple watch with the black leather loop, leaving $400 left for me to use on the iPhone which completely makes up the difference from the $440 Gazelle is giving me for my 6 Plus.

      But back to topic, if you’re hoping to subsidize with a 2-year contract you can still use att’s website. However, their site was lagging hardcore compared to apple’s website last year, and the absolute fastest way to preorder is through the Apple Store iOS app (sometimes when the store comes back online, it doesn’t update immediately because of some ISP side issues, etc).

      Good luck!

  2. There never were subsidies. Most people just paid a few hundred dollars as a down payment on the phone and the rest of it was paid for over the next 24 months in the monthly charge.

    Hopefully, as consumers realize the real price of phones, they will be more picky about what they buy, and keep them longer.

    1. In my experience ($200 iPhone 4 Verizon 2 year contract years ago) and similar to what I’ve read about others’ experiences, I never got a break in my bill after the 2 year contract was up.

      I also didn’t get a break in my bill after buying a 6 plus full-retail and having it replace the 4. So, the subsidies sure seem to have been real. (I paid full retail on the 6 plus so I could keep my unlimited data.)

  3. The shift from the former “subsidy” model to the new “interest-free loan” model had two consequences. The most important, and good one, was that it saved consumers a lot of money. The second, it made a lot of people aware of the actual cost of the phone.

    People thought that wireless service had to cost upwards of $60 per month. They also thought that their phone cost $200. Some people kept their phones well beyond their contract, even boasting with pride how they are “no longer locked into a contract, but free to go anytime they please”, all the while staying with the same carrier and paying full subsidy monthly rate. This essentially meant they were donating free money to their carrier. The phone was fully paid off by the end of the contract, but the monthly rate never went down.

    The new ‘interest-free loan’ model also saved people money on taxes. Mobile telephony service is taxed by close to 20% (and in some states even higher). Meanwhile, retail tax is well below 10% (and in some states below 3%). Under subsidy model, you were taxed on the whole monthly amount as a mobile service (20% +), even though part of it was actually your phone subsidy. Under ‘interest-free loan’ model, you pay taxes only on actual mobile service, while loan installments for the phone aren’t taxed (you pay retail tax on the whole value when you purchase the phone). For an average iPhone of $700, the difference can be over $50 — money you would otherwise donate to Uncle Sam (as a tax).

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