Your brand new car starts losing value the second you drive it off the dealer’s lot – that an old (and very true) addage. Like a new, a new piece of technology begins to lose value or depreciate as soon as you leave the store. With cars and with major tech purchases like a new iMac, this isn’t an immediate source of pain or dismay since you’ll be using them for at least a few years.
When it comes to smartphones and other mobile devices like our iPhones and iPads, depreceiation and loss of dollar value is equally true. The big difference is that most of us don’t hold to them for nearly as long.
If you’re in the habit of passing your iPhone or other mobile device onto friends or family members, that may not matter too much. But what if you’re looking to recoup some your investment?
Priceonomics, a site that helps people determine fair value for almost anything from cars to baby strollers, has some answers as well as some purchase tips when looking considering a new smartphone.
Priceonomics has been compiling a pricing guide for mobile phones and recently used that data to determine not just the value of many used models but also their rates of depreciation or how quickly smartphones lose their resale value. The packaged all that data into a report that is good news for iPhone owners and not so good news for owners of every other platform.
They did this by taking the new purchase price of each phone on its release day (without any carrier subsidies asscoaited with a new contract) and comparing that to its current average used price. Priceonmoics did this will all iPhone models, 70 popular Andrdoid handsets, and 30 common BlackBerry devices and seperated out phones based on age (new through four years old).
The results dramatically show iPhones holding notbly more resale value. After 18 months, an iPhone will be worth 53% of its initial price while Android and BlackBerry devices will only be worth an average of 42% and 41% respectively.
Breaking the numbers out based on hardware cost per month based on initial price and average resale price shows the iPhone with a per month hardware cost of $13.20 compared to Android’s 40% higher cost of over $18.
Even extending the age of the phones out to four years shows the iPhone with higher resale values.
The report offers some tips if you want to maxmize the potential resale value of a new phone including not opting for larger storage capacities as these don’t impact the ultimate resale value significantly and noting that it’s cheaper to buy a phone on contract and then pay an early termination fee than it is to buy a contract-free device.
One surprising tidbit about Android phones is that inexpensive models that are sold with pre-paid plans actually maintain more resale potential than more expensive and feature-filled models sold on contract.
The full report is really worth checking out since it includes a lot of interesting stats including some geographic breakdowns. Of course, it’s also worth hitting up the Priceonmics site to see the value of any phones you currently own. The site also includes a tablet price guide useful for iPad owners planning to upgrade when the iPad 3 hits.
Although the information in the report and pricing guides are consumer-oriented, they can be useful to businesses looking to maximize value on bulk mobile device purchases.