Market may be huge for reselling of first gen iPhones
Posted by Dennis Sellers 
Jun 12, 2008 at 7:34am
Aaron Vronko of Rapid Repair, which specializes in repairs of iPhones, iPods and other small devices, claims the launch of the iPhone 3G will lead to a brand new market that many are overlooking: sales of first generation iPhones.
He claims this new market birth will be a buzzing hotbed more active than the selling of 2.0 itself. Everything from busted warranties, the sale of damaged devices, carrier interoperability hacking, theft, and other market swirling topics, he claims, will change the face of the used cell phone market.
“Since the first iPhone was released, there was a substantial gray, market for iPhones that were bought from AT&T or Apple and unlocked,” he told Macsimum News. “They were then sold to people for use with other carriers or sold overseas in places such as China or Europe. This business declined dramatically over the past year for a couple of reasons. People who most wanted unlocked iPhones had their needs satisfied. And Apple brought some markets online with legitimate product releases in those countries.”
Up to now the market for unlocked iPhones has been for new devices. However, the release of the iPhone 3G will create a burgeoning market for refurbished iPhones, as well, according to Vronko.
“I think that, potentially, within the next six months, there will be 1.5 to two million first generation iPhones on the market as people try to sell them on eBay, CraigsList and places such as this,” he says. “I think there’ll be pretty good deals, with iPhones perhaps offered at under $100. There’s potential for third parties who want to organize this a bit more to step in and make a business out of it.”
In fact, Rapid Repair—which has 15 employees and services up to 500 devices a week from all over the US—plans to start a buy-back program for fully functioning iPhones. Vronko says they’ll test them and sell them to people who were under a contract to a wireless carrier besides AT&T or who couldn’t afford an iPhone at the onset.
With the iPhone 3G, AT&T and Apple are moving to an internal, not external, activation process, which will make it much harder for people in the gray market to buy and unlock them, Vronko adds. Current iPhone users get an US$200 subsidy with AT&T for an iPhone 3G if they’re already using one of the communication devices, so he sees lots of folks making the iPhone 3G upgrade.
For the first gen iPhone, this means people who couldn’t afford them initially may buy used ones for use with AT&T. Or, if the price point is low enough, to use as a stand-alone device for WiFi or for use for everything off the cellular network.
He says that the iPhone unlocking craze was unlike anything seen before.
“It’s estimated that as many as 25 percent of first generation iPhones sold were unlocked and not activated on AT&T in the US, but were used on another network or outside the US,” Vronko says. “This was a big change from how people used their portable devices in the past. When you look at game consoles and other portable electronics, there was only a small niche group of users who would unlock and do their custom thing with the devices. The iPhone was the first device that saw a large group of consumers doing this.”
As for the iPhone 3G, he thinks it will be “immensely successful.”
“Apple will well surpass its goal of selling 10 million iPhones this year,” Vronko says. “I think they could sell 10 million from this point on, in addition to the six million sold so far.”
OminusDominous Says:
I’m a very low-need Virgin Mobile user. I look at the phone in my pocket as the pay-phone I can’t find when I need one. My $20/90 Day payment is always more than I use. I would though greatly enjoy an iPod touch with a basic phone in it to use with my Virgin service. I sure hope I can pull this off in the secondary market.
Posted on June 12, 2008
Greg Alexander Says:
Yeah - wait for Optus and Vodafone to announce their on-plan prices of the 3G iPhone, then check eBay.
I just checked ebay then, and I can’t believe the number of “buy it now” new iPhones for $500 and $600.
Posted on June 12, 2008
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Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 4,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.
Greg Alexander Says:
I certainly am interested in getting a cheap unlocked iPhone. I’m unfortunately on a Vodafone Australia contract for another 18 months… so if I can get an iPhone for under $100 why not? Especially if v2 software works.
I’d probably disable the EDGE data… and use it more like an iPod Touch with a phone built in.
Posted on June 12, 2008