Hand-Me-Down iPhones Are Still An Important Market For Apple

Here’s a new cultural phenomenon: hand-me-down handsets. Owners of Apple’s hugely-popular iPhone are more apt than other cell phone consumers to either hand down their old device or sell it on the secondary market, researchers find. Indeed, Apple and carriers are discovering older iPhones are still money makers even after the latest device has grabbed the spotlight.

According to a study by Consumer Intelligence Research Partners (CIRP), 49 percent of iPhones are either given as a gift or sold after consumers buy a newer model. That compares with 21 percent of BlackBerry devices and 15 percent of handsets based on Google’s Android software.

The study broke down the hand-me-down iPhone options this way: 31 percent were given as a gift, while 18 percent were resold. Just 9 percent of Android phones were gifted and even fewer — 6 percent — were resold.

Researchers say used iPhones have always been more valuable than other devices, which were nothing more than high-tech paperweights without a carrier contract. Although reports suggest 11 percent of iPhones activated were used, “iPhones also had the advantage of having a useful second life as iPod touch substitutes, which made their value a little clearer from the start,” CIRP co-founder Mike Levin told the Wall Street Journal blog All Things Digital.

In fact, used iPhones mean extra cash that would normally go to pay Apple’s subsidies. The researchers noted AT&T iPhones can also be unlocked and used on other GSM networks. For Apple, the used iPhone means another route to grow its base of ardent followers. This was the intention when the Cupertino, Calif. company lowered the iPhone 4 price to $99 and made the iPhone 3GS free with a two-year AT&T contract.

While a great number of current iPhone owners were willing to pay extra fees for an early upgrade to the iPhone 4S, such a move is not always possible. For the rest of us, the secondary-market is the only way we’ll soon get an iPhone. In the case of Apple, a hand-me-down iPhone beats a pair of your brother’s old jeans any day.

Ed Sutherland

Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.