Pric plummets as Apple devotees dump used phones on eBay

Apple Inc.’s record-setting debut of the iPhone 4 has led to another surge: a flood of old iPhones hitting eBay, recyclers and discount sites., 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. While many of these devices are recycled, tossed out or socked away in a drawer, some can still command hundreds of dollars. Environmental groups, though, say the constant upgrades encourage waste.

As of July 2, Gazelle offered $168 (U.S.) for a perfect-condition 32-gigabyte iPhone 3GS, last year’s model. The company would have paid as much as $304 for the same product before the iPhone 4 came out, Kennedy said.

The phones can fetch more from second-hand 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 Chief Executive Officer 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 stores, including Best Buy Co., ran out of inventory.

In 2009, the 3GS model sold 1 million in its first weekend.

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 per cent in the U.S. between June 5 and June 28, said Katherine Chui, a spokeswoman for the San Jose, California-based company.

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., 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 per cent 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 the San Francisco- based company.

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 cellphones going weekly and monthly to other countries,” Westervelt said.

These electronics can contain hazardous materials that poison 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,” Westervelt 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. 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,” said Hikade, who lives in San Francisco. “Getting money for it helps pay for the new one. It’s a pretty sweet gig.”