JUNE 2013 IN

The Used Cell Phone

You may never have to buy a new cell phone again, if you don’t want to.

The Apple iPhone has proved to be more durable than anyone expected, with the result that there are millions of used iPhones for sale on any given day. Other manufacturers are imitating the qualities that make the iPhone so tough, so phones of all kinds will eventually be readily available on the secondary market.

Initially, used iPhone prices were higher than the prices of new iPhones. That is because the used iPhones come without subscription commitments, the cost of which can be ten times the price of the phone itself. It is also because initially there were so few used iPhones available. However, with the number of used phones on the market increasing, prices are coming down and may eventually reach parity with new phones.

This means you can buy used phones the way many people drive a succession of used cars without ever buying a new car. On the other hand, cell phone manufacturers are aware of this trend, and will look for ways to make new cell phones more attractive. For example, you can expect to see new models that are less expensive and better made than the models of two or three years ago. But to the extent that manufacturers succeed at persuading people to buy new cell phones, this will just drive down the prices of used cell phones further. Meanwhile, providers of used cell phones are also innovating. There is one company that specializes in buying cell phones with broken screens. They replace the screens and resell the repaired phones. The used cell phone market that was little more than a curiosity last year is now a practical way to obtain a cell phone, and this part of the phone market is here to stay.

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