New Phones Get All the Hype, but Consumers Still Love Old Models

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If you’re shopping for a used smartphone, you may be in for sticker shock. Used phones are hot commodities. 

“There are multiple tailwinds driving this business,” says Sean Cleland, head of mobile division at B-Stock, an online overstock marketplace that deals with big volumes of used phones. Cleland points to consumers holding onto older phones longer, fewer trade-ins and a lack of compelling new features on the latest models. There are signs many buyers have been waiting for Apple’s latest iPhone 16 and other new phones with new artificial intelligence features, such as summarizing emails, generating text and creating images.

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Consider the iPhone 15 Pro Max, released September 2023. It still maintains 90% of the original retail price on the secondary market for end buyers, according to B-Stock. Apple’s iPhones are particularly good at holding onto their value because of regular software updates, rugged design and quality hardware. That means they last longer, receive new features via software updates and continue to have strong security.

Rising prices for new phones have also spiked demand for older models. It varies a lot by model and age, but used phones run about $300, on average. That’s a steep discount from nearly $1,000 or more for new, high-end devices.

High prices for refurbished models have prompted carriers and phonemakers to work harder to get people to trade in old models, which can then be sold in the U.S. or overseas through brick-and-mortar and online outlets, such as Amazon, eBay and Best Buy. 

This year’s strong smartphone sales could help a little by bringing more supply to the refurbished market. Worldwide smartphone shipments are set to rise nearly 6% this year, according to tech market research company IDC. Apple is hoping its newest model scores outsized sales, based on the fact that 300 million iPhone users haven’t upgraded their phones in four years according to Wedbush Securities. 

Some solace to frugal shoppers who may grimace at the elevated prices of used phones: “When you get something that’s preowned, it's a darned good device,” says Cleland. From trusted sellers, devices are cleared of data, tested, fixed (if necessary), cleaned and can last for years.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.