Your Phone Loses Value Pretty Fast (Unless It's an iPhone)
priceonomics.com
priceonomics.com
When you buy anything non-Apple, you have to be a smart buyer. This can be good or bad, depending on your world view.
If you compare premium non-Apple brands, they compare favoribly to Apple. For example, my Nexus S was $300 off contract (brand new). This is much cheaper than the comparable iPhone 4 at that time, retains good resale value, and will probably be fast enough/supported for as long as the iPhone 4. On the PC side, ThinkPad T/X series offers similar (or even better!) reliability/cost effectiveness/resale value to MacBooks. For example, the x220 series configured new at lenovo will cost ~1000. Current resale puts it at around 800, which is better than the MBP (for e.g. base at $1249, refurb @ apple for $1049, and resale at around $950).
It seems that people always want to compare the iPhone (a single hardware line) to Android (software) which is just bizarre.
The only laptops I've seen which I've been at all envious of are later-model MBAs, and Toshiba's Satellite Z830 (damn that thing's light).
But if you don't mind a heavy laptop, the x220 does look nice. 15 hours video (with the $180 battery hump thing) definitely raises the bar.
The T/X run well with linux, so you get all free software ;-) Also, the x220 is 3.3 lbs [1][2] vs 2.96 lb [3] for the air.
[1] http://www.lenovo.com/psref/pdf/tabook.pdf
[2] The 4-cell actually puts it at 2.97 lb, but the capacity is only 28 Wh compared to the Air at 50 Wh. The 6-cell on the other hand is 62 Wh.
Since I'm not aware of a single Android phone that sells for more after two years than the full price two years prior, I'm not sure how any can compare "favorably" (limited run developer models excluded).
Pretty sure absolutely no phone sells for more than the full initial price, iPhone included. Remember, the price you see in ads are carrier subsidized, an actual new iPhone is approximately $650 without a contract.
On that note, I just bought an AT&T iPhone 4 for $250 a month ago. Not bad of a deal for 18 months later.
Really? It might be a decent indicator of product quality relative to other products on the market, but even then, plenty of extrinsic factors - from speculative bubbles to the lack of knowledge of longer-term product quality - can influence the perceptions of relative value that drive market prices.
That aside, how indicative of the overall market for phones is the specific segment of those who buy second-hand phones? Unlike houses or cars, few people actually buy used phones, and those who buy new phones aren't usually thinking about resale price at their initial time of purchase.
Does resale price really say a lot about the underlying product quality of a mobile phone?
"We firmly believe", on the other hand, is not an indicator of anything. "We've defined quality in such a way that" would be more apt - quality is a hard-to-define term, and they don't even try.
Consider if a car company released 4 model updates per year instead of one.
Your Hyandai 2013 Quarter 1 would depreciate faster as the 3 newer models came out (granted that each new model would have more/better features - heated seats, leather, auto drive, whatever).
So as an iPhone buyer/owner, you know your phone will be state of the art for foreseeable future, where as with Android, you phone will be (perceived anyway) as antiquated, much more rapidly.
It'd help the situation much if OEMs simply made ~4 models (not counting radio configs) every year, and stuck with them across carriers. Moto, for instance, would have:
* RAZR (flagship)
* Milestone Pro (keyboard)
* Milestone X (mid-range)
* Defy ("free" phone)
on every carrier, and that would be that.
Android's plunging prices are not really a depreciation of the hardware value, but rather an indication of the rapid pace of the software - well, I'm ignoring fragmentation for the sake of argument. Like you said, "antiquated, much more rapidly," but not by specs - by software features. Example: Ice Cream Sandwich is slowly becoming available.
The iPhone lives off in its little garden - I agree that "you know your phone will be state of the art for foreseeable future." Apple strives to maintain vertical integration, so their software moves slowly. It's lock-stepping with their hardware. Hardware innovation generally moves at a steady, predictable pace.
Why does it matter that Android's value is more closely tied to the software? That's Google's area of expertise. They've tried to make the hardware a commodity. If it doesn't end up fragmenting so badly consumers start leaving (and I don't think they will) -- then the hardware will not garner the big margins. The software will (under Google's control, hopefully monetizable by them).
Software innovation can be more volatile, but especially for mobile phones it can be what sets you apart. Arguably, Apple has the software edge - hence, Android's furious pace.
But the sales figures for those kinds of "cars" indicate those "cars" aren't worth much attention. Same for phones. If Android can run on them, great.
What other commenters said: maybe it would help if we focused on premium Android phones.
That in itself can explain the depreciation rate: new Android phones are so much better and cheaper than old Android phones that the old ones can't compete except at a very low price point.
I may have missed something, but given that prices are supposed to reflect the supply vs demand ratio (in a sane market), how can they end up "firmly" believing that resale value is an objective indicator for quality ?
The difference in depreciation between iphones and androud seemed pretty small to me, and probably represents the overall inflated price of the half-eaten fruit logo. I see laptops on craigslist with similar specs: $2000 for Mac and ~$500 for Dell. Like Billy Beane, I buy cheap and undervalued.
In other words - imagine a rich person buying a new iPhone every year and selling the old one to his poor friend. Both of them eventually pay the same amount for the phone, but the poor friend got a used one.
Thus, a person selling their 1 year old iPhone would fail to recoup 40% of the sticker price overall while someone buying 1 year old phones and selling them a year later would fail to recoup all but 25% of the sticker price, give or take.
Wow, what a leap. Is the author aware the purchasing a phone for resale value is actually NOT the main reason to purchase a smartphone? Any article that starts by quoting MG Siegler should immediately be discounted anyway.
The difference in resale value versus the entire expense of owning these phones is insignificant. Or at least it's not significant enough to outweigh the preference one might have for a given phone. What if the numbers were flipped? How many iPhone owners would choose to switch to Android if they knew they could save $70 over the next year and a half?
If your choice of smartphone doesn't change the cost paid to the carrier over the term of a contract, the data point is useless.
Hey fellas - there is more to a phone than resale value. If you're only thinking about how much you can sell it for at the end of possession, then I think I'll give your review a skip.
"It's probably hard for a Mercedes owner to describe to a Honda owner how attention to detail makes their driving experience better."
Right, and said Mercedes owner probably isn't going to buy a Honda next time just because it holds its resale value better.
(The car has been pretty robust, and yes, the passenger capsule wouldn't be as nice as in a merc... but then again, when new these things go for half the price of a merc)
Buying used smartphones, on the other hand, is great - you can get a G2X or a Dell Venue Pro (excellent Windows 7 phone) for under $300 easily, and it will work just as well as any other phone (especially the G2X with a custom ROM)...
I'd say it indicates the speed of improvement--whether quality has topped out, or is still improving.
Resale value for a hammer in a year migh be close to 100% of its original value. It might be used and scratched, but it still works as new, and there aren't any new revolutionary hammers out on market. Same with DSLR lenses, for example.
Top end MTB bikes are of very high quality, a joy to ride. But they depreciate sometimes by 50% in a year: new models are out, lighter, stronger, better-handling and everyone wants to upgrade.
be careful. Some high-end MTB brands depreciate more than others, which is the exact point this article is promoting about phones.
Brooks saddles look the same, act the same and cost the same now as 20 years ago. A saddle that has been sitting in warehouse for 5 years would probably have about the same market value as saddle made this year. I'm no Brooks expert but that's the impression I get.
Shimano on the other hand updates its component groups each year. Their products are highly evolved already, but still they find things to improve. So people upgrade.
http://www.itp.net/553344-hackers-pay-top-dollar-for-old-nok...
i've found that nokias sell well second hand. i wouldn't recommend an iphone second hand as they are much more fragile than old solid nokias. i've seen a number of iphones that the mic or wifi no longer works on and knowing the users i don't think they abused the devices that much.
http://www.bloomberg.com/news/2012-01-24/verizon-posts-loss-...
> Verizon and rivals such as AT&T Inc. sell the Apple Inc. (AAPL) iPhone and other smartphones at a loss as they compete to get customers to sign up for contracts that typically run for two years.
Verizon et al, run a 24x7 data/voice nationwide network.
That involves constant physical construction and capital investment.
Apple is the clear winner, selling their product at a premium with the middle man subsidizing the consumer's purchase price.
I've sold each model iPhone to date for more than I paid for it, even when paying full (unlocked) rate. Apparently people consider there to be significant value in a no contract phone.
Turns out that the secondary market for the iPhone is nearly as robust as the primary market. And it’s growing steadily larger and more important for Apple’s carrier partners, and for Apple itself.
Great read, I'm now interested in your business.
A $1000 phone that loses 35% of its value ($350) compared to a $500 phone that loses 50% of its value ($250) can put things into perspective.
A high re-sale value is the market telling you this is a well-regarded car brand. The car itself could be the biggest lemon on the lot.
So now we're supposed to judge something as complex as a person's trustworthiness based on their consumerist choices? I understand it's meant to be taken as an offbeat joke but as humorous as it's meant to be, statements like that make me feel troubled and mildly depressed. I'd really not like people to define me based on what phone I have :( Let's just have a beer and talk instead :\
[1] http://www.verizonwireless.com/b2c/store/controller?item=pho...
It might be that the researchers were worried only about germs that can survive for only a few days or cannot survive the type of cleaning achievable without completely disassembling the phone, but it is not obvious to me that that is the case. For example, one hears about these biofilms that allow germs to survive for very long times.
What are your reasons for believing that just being in the same room as other people exposes a person to more germs?