Apple win whacks Android resale prices
Resale site Gazelle.com reports a 50% increase in Samsung smartphones since the verdict, which led to a 10% drop in prices.
This post comes from Quentin Fottrell at partner site SmartMoney.
While many experts predict Apple's court victory over Samsung could shake up the wireless industry over the long term, it's already having an impact on one key area: the resale market.
Since the $1.05 billion verdict Friday -- which found that Samsung infringed on six Apple patents -- customers of Samsung have been dumping their Android products on at least one major resale site. Gazelle.com reports a 50% increase in Samsung smartphones over the past three days, which has led to a 10% drop in prices for those devices. "Consumers seem to be jumping ship," says Anthony Scarsella, chief gadget officer at Gazelle.com. "We expect this trend to continue, especially with this latest verdict."
Some experts predict prices will continue to drop as Android phones flood the market. The court decision, they point out, is creating a lot of uncertainty about Android upgrades. The next generation of Samsung phones may be very different from those on the market today. (Post continues below.)
Consumers get used to certain key features on their favorite smartphones -- like the way apps are laid out or how they zoom in on pictures, experts say. "Android customers are no longer sure of that," says Yung Trang, the president of deal aggregator TechBargains.
To be sure, even before the ruling Android products didn't hold their resale value as well as iPhones. The Samsung S II -- which sells for $199 new on a two-year contract, the same as a 16GB iPhone 4S -- currently goes for $90 on resale site NextWorth. The iPhone, however, sells for as much as $300 on NextWorth; at that price, consumers often make a profit on the subsidized price when they trade up. "This will continue to hurt Android resale values," says Louis Ramirez, senior feature writer on Dealnews.
And that gap is likely to widen, says Jeff Trachsel, chief marketing officer of NextWorth. And Samsung's problems may get worse before they get better: On Monday, Apple filed a notice with the U.S. District Court identifying eight Samsung devices it wants to ban in the U.S. (Samsung did not respond to requests for comment.) Trachsel and other experts also say the verdict comes at a bad time for Samsung with the iPhone 5 due for release on Sept. 12.
"The court decision reasserts Apple's dominance in the space," Trachsel says.
Android models, of course, still have some key features that iPhones don't. For starters, they usually have considerably bigger screens. Motorola Droid Razr Maxx and HTC's One X both have 4.3-inch displays, and Samsung S III comes in at 4.8 inches -- versus the iPhone's 3.5 inches.
The S III battery has more than 10 hours of talk time; the Droid Razr Maxx has 21.5 hours -- far more than the mere eight hours of talk time provided by the iPhone on 3G. Most Android phones use the Adobe Flash Player for videos, since they use Google's operating system; the iPhone doesn't.
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