In with new iPhones; what to do with old?

Many iPre­de­ces­sors con­signed to re­sale on­line amid craze for Ap­ple’s lat­est

Austin American-Statesman - - BUSINESS - By Ryan Flinn

Ap­ple Inc.’s record-set­ting de­but of the iPhone 4 has led to an­other surge: a flood of old iPhones hit­ting dis­count and auc­tion web­sites and re­cy­clers.

Gazelle.com, a site that buys elec­tron­ics from con­sumers, pur­chased 20,000 used iPhones in the two weeks af­ter Ap­ple and AT&T Inc. be­gan tak­ing pre­orders for the iPhone 4. That com­pares with 350 in a typ­i­cal two-week pe­riod.

“It’s off the charts,” said Kristina Kennedy, a spokes­woman for Bos­ton-based Gazelle, re­fer­ring to the in­flux of old phones. “It’s three times what we pro­jected.”

The yearly in­tro­duc­tion of a new iPhone, com­bined with the de­sire of Ap­ple fans to own the com­pany’s lat­est de­vices, has put mil­lions of old phones back in cir­cu­la­tion. Many of these de­vices are re­cy­cled, tossed out or socked away in a drawer, but some can still com­mand hun­dreds of dol­lars. En­vi­ron­men­tal groups, though, say the con­stant up­grades en­cour­age waste.

As of July 2, Gazelle of­fered $168 for a per­fect-con­di­tion 32-gi­ga­byte iPhone 3GS, last year’s model. The com­pany would have paid as much as

See NEW, B6

$304 for the same prod­uct be­fore the iPhone 4 came out, Kennedy said.

The phones can fetch more from sec­ond­hand sites than they cost new from AT&T, the iPhone’s U.S. car­rier — in part be­cause AT&T of­fers a sub­si­dized price, de­pen­dent on sign­ing a con­tract.

Shop­pers snapped up 1.7 mil­lion iPhone 4s in the three days af­ter they went on sale, lead­ing Ap­ple CEO Steve Jobs to call it the com­pany’s most suc­cess­ful prod­uct launch. Mod­els cost­ing $199 and $299 de­buted in the U.S., U.K., Ja­pan, France and Ger­many on June 24. Many re­tail­ers, in­clud­ing Best Buy Co., ran out of in­ven­tory. In 2009, 1 mil­lion 3GS units were sold in that model’s first week­end on the mar­ket.

EBay Inc.’s site lists thou­sands of used iPhone 3GSs for sale, with prices start­ing as low as 1 cent. The num­ber of iPhone 3 mod­els — in­clud­ing the older 3G — rose 124 per­cent in the U.S. be­tween June 5 and June 28, said Kather­ine Chui, a spokes­woman for San Jose, Calif.-based eBay.

EBay has also be­come a hub for peo­ple look­ing to make a profit on the iPhone 4, with the av­er­age sell­ing price hit­ting $942, she said.

BuyMyTron­ics.com, which pur­chases used elec­tron­ics, also saw a rush of cus­tomers try­ing to sell their old iPhones.

“It went crazy,” said Brett Mosley, CEO and founder of the Den­ver-based com­pany. In May, it was buy­ing 10 iPhones daily, he said. “The last two weeks we have av­er­aged al­most 40 iPhones a day.”

Prices have dropped as a con­se­quence, he said. The phones fetch about $182 on the site, 35 per­cent less than at the start of June.

Sell­ers also are turn­ing to Craigslist Inc., the clas­si­fied-ad­ver­tis­ing web­site.

“Some of the more cre­ative Craigslist users may try to barter their older phones, and per­haps some of the more gen­er­ous users will give their 3s away on our free sec­tion of the site,” said Su­san MacTav­ish Best, a spokes­woman for San Fran­cisco-based Craigslist.

Not ev­ery­one thinks trad­ing in an old iPhone is a good idea.

Used elec­tron­ics of­ten end up get­ting dumped over­seas, in vi­o­la­tion of a United Na­tions treaty, said Sarah Wester­velt, a pol­icy di­rec­tor for Basel Ac­tion Net­work, a Seat­tle-based en­vi­ron­men­tal ad­vo­cacy group.

“When mil­lions of us are re­fresh­ing our technology with the lat­est bells and whis­tles, there are lit­er­ally thou­sands of truck­loads of cell phones go­ing weekly and monthly to other coun­tries,” Wester­velt said.

These elec­tron­ics can con­tain ma­te­ri­als that harm the en­vi­ron­ment, she said.

“We think, ‘Hey, I need a new phone,’ and we don’t quite un­der­stand the im­pacts when these heavy met­als and these im­mor­tal el­e­ments end up in the wa­ter and air and soil of very poor com­mu­ni­ties in de­vel­op­ing coun­tries,” she said.

Steve Dowl­ing, a spokesman for Cu­per­tino, Calif.-based Ap­ple, said all of the elec­tronic waste col­lected by his com­pany is pro­cessed do­mes­ti­cally and not shipped over­seas. In­ter­na­tion­ally, the de­vices are re­cy­cled in the re­gion where they are col­lected.

Ap­ple ac­cepts iPhones and other de­vices from cus­tomers for re­cy­cling at its re­tail stores. And it pro­vides a free mailer to send in old prod­ucts, he said.

BuyMyTron­ics.com and Gazelle also say their waste isn’t sent to de­vel­op­ing coun­tries.

“Ev­ery­thing is re­cy­cled in First World coun­tries,” even if that means los­ing out on some fi­nan­cial gain, Mosley said. “We turn down a lot of busi­ness.”

Eric Hikade, 34, the vice pres­i­dent of prod­ucts for KaCh­ing Group Inc., waited 90 min­utes to buy his new iPhone. He was able to re­coup half the price of the phone by sell­ing his old one on Gazelle.

“The $300 phone doesn’t re­ally cost $300,” Hikade said. “Get­ting money for it helps pay for the new one. It’s a pretty sweet gig.”

David Paul Mor­ris BLOOMBERG NEWS

Ap­ple’s iPhone 4 cre­ated a buzz among con­sumers who wanted the new­est technology – but it also helped cre­ate a glut of older-model iPhones.

Gazelle.com, which buys used con­sumer elec­tron­ics, of­fers $1 8 for a 32-gi­ga­byte iPhone 3Gs in per­fect con­di­tion – down from $304 be­fore last month’s de­but of the iPhone 4. En­vi­ron­men­tal ad­vo­cacy groups are concerned about where older phones end up.

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