And should you use an iPhone for the trade-in value?
Apple’s iPhone holds a larger market share than the top three Android brands combined. Plus, the iPhone lasts longer than Android devices. As a result, it’s worth more on the aftermarket and at trade-in.
Have you noticed that all the great trade-in deals require an iPhone? Carriers value used iPhones above used Android devices, so they’re willing to shell out for your old Apple phone. Of course, there are several reasons for this preference, but it mainly comes down to supply and demand.
iPhones Dominate the Used Smartphone Market
Research from the IDC indicates that smartphone sales are at a serious low point. Shipments declined by 18.3% during the final months of 2022. This decline is mainly due to our rocky post-pandemic economy, though consumer habits and industry trends are also to blame—smartphones last longer than they used to, and new models rarely offer enticing new features, so consumers aren’t interested in upgrading.
But as new phone sales slow, used phones are ballooning in popularity. Trade-in and recycling programs have created a huge smartphone refurbishing market, which is expected to grow at a CAGR of 10.2% (basically, the refurbished phone market is worth about $66 billion today, and it may be worth twice as much by the end of the decade).
Counterpoint Research shows that Apple dominates the refurbished market. And in 2022, when smartphone sales slumped, Apple’s share in the refurbished market only grew. Johanna Stern of the Wall Street Journal recently spoke with USMP and Back in the Box, two major players in this industry, and found that they prefer old iPhones over old Android devices.
Clearly, the demand for used iPhones is greater than the demand for used Android devices. And this demand is reflected at trade-in. You can trade in an iPhone that’s several years old and score a massive trade-in value on a new device. (The only comparable trade-in deals are for Samsung Galaxy devices, which makes sense, as Samsung is the second largest name in the refurbished phone market.)
Admittedly, these crazy trade-in deals are mainly an attempt to lock down consumers and push upsells. But someone always benefits from your old phone—a refurbisher may sell it for a profit (especially if it’s an iPhone), and if it goes to recycling, it may be stripped for precious metals and copper (Apple procures tons of metal through its aggressive recycling program, according to the company’s annual environmental reports).
Why Is Demand for the iPhone So High?
The iPhone is the king of smartphones. At least, that’s what market data portrays—Apple holds nearly 57% of the entire U.S. smartphone market share, more than Samsung, Motorola, and Google combined. Notably, Apple products held 8 slots in the top 10 best-selling phones of 2022.
This demand isn’t a mistake. Apple makes good stuff, obviously, but it’s also an effective advertiser, and it’s one of the most recognizable brands in the United States. But more importantly, Apple knows how to attract and lock down its customers.
Apple has an incredible amount of control over its hardware and software. You can buy a Windows PC or Android phone from a dozen different brands, but if you want a Mac or iPhone, you have to buy one that’s made by Apple. Hundreds of Android phones might launch in one year, but there are only a handful of new iPhones to choose from.
Because Apple deals with relatively few products, it can tie these products together into a strong ecosystem. If you use an iPhone, you can receive voice calls, video calls, or text messages on your Mac. An iCloud subscription adds new features to all of your Apple products, and so on. These features are very attractive to customers. But if you leave the Apple family, you lose these perks, so
There’s a secondary benefit to Apple’s tight-knit ecosystem—it can offer extended support for its products. Some models of the iPhone receive seven years of software updates. This feat is unmatched by any Android device (barring the Fairphone), and it helps the iPhone retain its value on the secondhand and refurbished market.
Should Any of This Matter to You, the User?
It’s tempting to think that the iPhone is “better” than Android devices. After all, it’s worth more at trade-in, and it dominates the smartphone market. But this is simply a case of supply and demand. Apple is a master of exclusivity and walled gardens—it attracts and locks down customers, ensuring continued popularity for its products.
Maybe you want an iPhone because it holds a good trade-in value. Frankly, I don’t believe that this is a real selling point. Carriers don’t pay a fair value for your smartphone at trade-in; they either undercut you or give you a ridiculous limited-time offer. The goal, in either case, it to get you on a monthly payment plan that prevents you from switching carriers (and gives you an opportunity to upgrade your phone plan or buy overpriced accessories).
Preference is preference; you should buy and use whatever phone you want. If money’s tight, buy the phone that you can afford. And if you need a phone for business or creative pursuits, buy one that offers the features you want.
If you need to trade in your phone, try to wait for a good limited-time deal to come around. And don’t get things twisted—you should never buy something on credit that you can’t afford in cash (outside of actual emergencies). Maybe a trade-in saves you 50% on the new iPhone; that’s great, but now you’re $600 in debt for a luxury item that you probably didn’t need to buy.
