Big screen rumors and the usual even-numbered-year redesign combine to prompt early adopters to raise cash for next month's new iPhone
Apple will have a "tremendous" opening of the iPhone 6, buyback vendors said today, basing their predictions on activity so far by consumers locking in prices for their old smartphones.
"There's tremendous pent-up demand for a larger-screen iPhone," said
Jeff Trachsel, chief marketing officer at NextWorth, a Billerica, Mass.
company that buys used consumer electronics devices, including tens of
thousands of iPhones each year, and resells them domestically or
overseas.
Trachsel and others based their opinions on an increase this week in the number of quote requests for used iPhones.
"We've seen a lift of about 350% from the baseline this week," said
Trachsel, referring to quote volume since Monday compared to the average
of the month prior to that. "That's up from a lift of 182% last year,
or almost two times the acceleration."
NextWorth mined its data for this week because it marked the
beginning of its 30-day lock guarantee -- where it promises to pay a
quote of today for up to a month in the future -- that would carry
customers through the expected sales launch of the iPhone 6. Most
analysts, Apple watchers and pundits believe Apple will unveil its new
iPhone(s) on Sept. 9, and begin selling them on Sept. 19.
Boston-based Gazelle has seen a similar boom in quote volumes. "We've
seen a 50% increase compared to 2013," said Alyssa Voorhis, a senior
tech analyst at Gazelle, in an interview.
On Monday, Gazelle kicked off its own lock-in that guarantees quotes
through Oct. 10. Like NextWorth, Gazelle offers the price lock-in so
that customers know how much they'll be paid for their used iPhone, but
have enough time to buy and activate a new phone before they have to
ship their old one to the company.
It's normal, said both Trachsel and Voorhis, for their companies to
see a spike in quotes in even-numbered years, because that's when Apple
historically introduces new iPhone designs. 2012's iPhone 5, for
example, was far different from 2011's iPhone 4S -- a bigger display for
one -- but much more similar to what Apple unveiled last year in the
iPhone 5S.
The every-other-year phenomenon is well know, of course, because
Apple capitalizes on the exterior redesign -- a "form factor" change in
Trachsel's words -- to sell more iPhones. "The form factor is the single
biggest reason to trade up," said Trachsel today in an interview. "If
the new model looks the same as last year's, we don't see the same
interest in trading in."
So part of the upswing in quote volume -- and thus interest on the
part of consumers to trade in their current phones for cash -- is driven
simply by the fact that everyone anticipates an iPhone design refresh,
and would have even if the talk of larger screens had not been
incessant.
But Trachsel and Voorhis were both confident that, from the early
data, the iPhone 6 would be a much bigger hit than either last year's
iPhone 5S or the preceding year's iPhone 5, at least in part because
it will come with a larger screen. Apple sold 51 million iPhones in the
first full quarter after the introduction of the iPhone 5S/5C last
year, and 48 million in the same period of 2012 and the iPhone 5.
One reason for that confidence, said Voorhis, is that Gazelle has
already seen a 15% to 30% jump in quotes for used Android smartphone
compared to the benchmark of the 30 days prior to Monday. "Apple might
finally offer what some Android users have been clamoring for, a larger
iPhone," she said.
The speculation about bigger iPhones has centered on one with a 4.7-in. screen, another with a 5.5-in. display.
As the expected Sept. 9 announcement approaches -- that date has been
widely reported for at least the last two weeks -- others will get on
the trade-in bandwagon. In the past, trade-in volume has climbed at the
reports of a definitive announcement date, then soared as soon as
Apple's introductory event concluded.
"Announcement day is Gazelle's Christmas," said Voorhis.
That has shown up in the mix of iPhone models people are requesting
quotes for. NextWorth, for example, has seen a big shift in the mix: In
the 30 days prior to Monday, 69% of the iPhone quotes were for the
iPhone 4 and 4S; this week 61% of the quotes have been for the iPhone 5
and iPhone 5S.
"Early adopters," said Trachsel of the latest quotes. "Before it was
people looking to get a new discounted 5S [iPhones], not the early
adopters like this week. Early adopters are willing to pay termination
fees to get the very newest."
Voorhis also cited a recent survey commissioned by Gazelle to back up her contention that the new iPhone would be a hit.
"Forty-six percent of all smartphone owners want an iPhone 6, and
they're particularly interested because of the larger screen, even
though they haven't seen it yet, only bits and pieces of [leaked]
components," Voorhis said. Another 21% said they were undecided, but she
suspected that many of those were only waiting for confirmation of the
rumors.
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