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The Worm in Verizon iPhones: Lower Resale Value

It’s looking more like consumers will have an extended wait for a fifth-generation iPhone, with the latest rumors (from an AT&T insider) pushing the unveiling to September instead of the usual June.

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That’s good news for Verizon iPhone owners who plan to trade up to a newer model. They’ll have more time to save up to make up for the handsets’ lower resale rate.

Four months out from the Verizon release, the carrier’s iPhones are fetching substantially less than AT&T handsets on the secondary market, says Anthony Scarsella, the chief gadget officer for resale site Gazelle.com. The GSM technology in AT&T’s phones is used in more countries than Verizon’s CDMA and allows simultaneous voice and data use, both of which create more demand. “Once it can be unlocked, it can be used on any carrier,” Scarsella says. “The secondary market is huge.”

Gazelle is currently paying up to $328 for a mint-condition 16GB iPhone 4 from Verizon with accessories – 16% less than the $390 for one in the same condition from AT&T. 32GB iPhone 4 prices are $331 and $394, respectively. Radio Shack is offering up to $262.50 for a Verizon 16GB phone, versus $282.54 for AT&T. On 32GB models, it pays $280.14 and $320.14.

AT&T spokesman Mark Siegel says he’s not surprised that the carrier’s phones hold their value better. “There’s no question that the technology AT&T uses for its phones… has significant advantages over CDMA,” he says. Verizon declined to comment. Apple did not respond to requests for comment.

To be sure, in all cases, the resale values are more than the subsidized prices of $199 and $299 a new subscriber or someone renewing their contract would have paid. But when you’re talking mid-contract upgrades, which would be the case for any Verizon iPhone owners and many AT&T ones, the gap translates to up to $63 extra paid on the phones’ full retail price of $650 and $750.

Future generations of iPhones may not have a similar value discrepancy. Rumors about the new handset include a dual GSM/CDMA chip, which could enable owners to take it with them no matter which carrier they switch to, and keep its resale value elevated. Of course, that detail, along with the phone’s release date, is still up in the air. Verizon and AT&T both declined to comment on iPhone 5 availability.

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      As political intermediaries between rank-and-file members of company and it.
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      Kind of the direct rights and responsibilities – subject estates have turned to citizens
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      History of Technology (New York: Oxford University Press, Irrigation, pp. 520 – 527, vol. 1, and
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    • Hey, I really don’t know how to expialn this, but I’ll do my best to do so. Anyways, whenever you have something like a remote control, iPhone, etc. and you get a video camera and/or camera (on phone, or digital), and you press a button or something you’ll always see the light, but you cannot see it physically, you can only see it on pictures, or video.

    • VZ is a joke….

    • “There’s no question that the technology AT&T uses for its phones… has significant advantages over CDMA,” says AT&T.

      Nonsense. CDMA is a superior technology, but was introduced later–meaning there are more people forced to use GSM technology, thus the greater demand. It has nothing to do with better technology, as Consumer Reports makes crystal clear every year.

    • Hi Michelle,

      I was referring to this comment:
      AT&T spokesman Mark Siegel says he’s not surprised that the carrier’s phones hold their value better. “There’s no question that the technology AT&T uses for its phones… has significant advantages over CDMA,” he says

      The main advantage of GSM is that you can easily swap SIMs and there is worldwide coverage. However, AT&T iPhone are SIM locked to AT&T, which removes this advantage.

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  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to quentin.fottrell@dowjones.com or tweet @SMPayDirt.

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