The secondhand iPhone market recently paid close attention when Apple CEO, Tim Cook shared that the company is seeing five times the trade-in volume when compared to this time last year. While at first glance this is a surprising metric, it begins to make sense when you consider the dynamics of Apple’s earlier full release date, the following shipping backup, and Apple’s aggressive trade-in promotion for the 2019 fall and winter seasons.
What’s Happening with Apple’s Shipping Schedule this Year?
One big difference between 2019’s and 2018’s trade-in volume is that last year’s volume upswing started later in the year.
Apple usually releases its latest-generation iPhones in the fall. All except two of Apple’s iPhone models have had fall releases. The original iPhone and iPhone SE from several years ago are the exceptions. Fall releases are ideal because they provide a shipping window that schedules deliveries right on time for the holiday season. Apple released 2019’s iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max on Sept. 20. This release date was earlier than in 2018, where Apple split up the launch by releasing the iPhone XS and XS Max more than a month before the iPhone XR on Oct. 26. Apple did something similar in 2017, where the iPhone 8 and iPhone 8 Plus shared a release date of Sept. 27 while the iPhone X was released several weeks later on Nov. 3. However, 2017 and 2018 were anomalies if you consider the last decade of Apple’s releases. In 2019 Apple seems to have returned to its regular release pattern.
What impact is this going to have on the trade-in and resale markets? The explanation in brief is that the iPhone trade-in market is already at a fever pitch in the pre-holiday weeks of 2019, whereas last year the spike in volume did not begin in earnest until December.
The earlier full release date in 2019 takes away only some of the mystery behind why the company is seeing five times the number of trade-in devices when compared to the same time last year. An additional explanation for such a steep rise in trade in volume is aggressive promotion of the trade-in program by Apple.
Apple’s Aggressive Trade-In Push
More Apple devotees are feeling inspired to trade their phones because of Apple’s heavy promotion of its trade-in program during this past year. The push has been seen both in retail stores and on the Apple website. All indicators are pointing to the fact that Apple’s aggressive trade-in campaign is working. In fact, one-third of all customers who enter an Apple store end up trading their existing devices for new devices.
A combination of an earlier-than-usual shipping schedule and Apple’s eagerness to get customers to trade up has created the perfect storm. Many Apple customers who upgrade every year are moving fast to unload their existing Apple devices in exchange for a new iPhone 11 before plum trade-in options disappear. Trade-in values are still set quite high for the 2019 holiday season, with a range that goes from $100 for the iPhone 6s to about $600 for the iPhone XS Max.
The Final Factor
There is one more contributing factor that has resulted in the booming resale market. Apple surprised the market this year by pricing its new entry-level iPhone below expectations. The new iPhone 11 is priced a full $50 below what most mainstream analysts had expected. That $699 price point for the base iPhone 11 is likely playing a role in giving some customers the final push they need to commit to a trade-in agreement this year. It may also have put downward price pressure on high end used iPhone models.
The Bottom Line on 2019’s iPhone Resale Outlook for the Fourth Quarter
Apple could easily ship 40 million iPhone 11 units before 2019 is over. This year’s heavy trade-in cycle is already driving up volume as we inch closer to the end of December. That means the early shipment schedule that has impacted the iPhone 11, the iPhone 11 Pro, and the iPhone 11 Pro Max is like an early Christmas present for savvy resellers marketers. Don’t let this year’s holiday resale boom pass you by. We Sell Cellular can help you find the devices you need, whether you’re a retailer, wholesaler, distributor, or refurbisher looking to make the most of the high trade-in volume this winter.
