The Rise of Smartphone Resellers
In recent years, the U.S. has moved increasingly away from “feature phones,” which are regular cell phones with a few extra features like some Java-based games and a barely usable Web browser, to smartphones, which are phones that come near to being a handheld computer because they have so much capability.
The smartphone revolution is mostly a U.S. phenomenon because a) we can afford it, and b) we have carrier subsidies. In many parts of the world, particularly emerging economies like China, India and Latin America, there are no such subsidies. The phones are sold unlocked and you are month to month with the carrier of your choice. Not that they have many to choose from.
This has led to the rise of smartphone resellers in the U.S. who take advantage of planned obsolescence and economic differences between the markets. The retail price of the iPhone 3G that I owned and used for two years was $599 in 2008 but only cost me $199 thanks to the AT&T subsidy. Well, it’s still $599 (converted to local currency) in the rest of the world, where they don’t have a subsidy.
This has created an opening for companies to purchase smartphones in the U.S. that are coming off contract, clean them up a little, and resell them in other parts of the world. They can pay a decent price to make them attractive to American sellers while still selling them for a tidy profit overseas, where a phone like the iPhone 3G that we would consider obsolete is still advanced technology.
This has led to a growing industry of resellers eager to buy your old phone. Many of them have been in business for a while, buying other items like old laptops and reselling them to the third world. These sites are really hitting their stride with smartphone repurchase since there are so many more phones for sale. When I decided to sell my iPhone 3G, I looked into my options.