Resale market for iPads is booming
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The release of Apple's fourth-generation iPad and iPad Mini has created a booming resale market for used tablets, spawning a virtual yard sale where eager fans can get a bundle of cash to put toward their next Apple purchase.
The iPad resale market is relatively new -- the device is less than 3 years old -- but is already flush with opportunity. Online marketplaces such as Gazelle and uSell.com, which buy and sell used electronics, saw a huge spike in third-generation iPad sales immediately after Apple announced its upgrade late October.
"Our site just kind of blew up," said Anthony Scarsella, chief gadget officer at Gazelle.
Some Apple customers protested upon hearing that the Cupertino, Calif.-based company would release a fourth iPad just seven months after the third generation hit stores. Hundreds of dollars down the drain, they said, on a product that became obsolete in less time than a gym membership expires.
But the fuss may have been overstated. While iPad owners can't make back all of what they spent, some websites are offering $300 to $400 for the 32GB version and up to $500 for 64GB. The average price on eBay is $530.
The third-generation iPad cost $499 to $829 new.
BTIG research analyst Walter Piecyk said the secondhand iPad market is a "growing phenomenon."
"It's a new opportunity," he said. "There's real money in it for people."
Daniel Brauser, founder and president of uSell, said Apple fans should use the money they make off their iPad to subsidize a fourth-generation purchase, which has comparable pricing to the third. "People are ready to get the next latest and greatest on this short product cycle, and they don't realize it, but there's a lot of value left over," he said.
While prices are likely to fall as the tablets age, analysts don't expect this resale boom to be short-lived. Emerging markets -- particularly Latin America and Asia, where Apple products are less available and often too expensive for consumers -- will continue to drive demand.
"Clearly, there's a pretty big population of people who don't think that the third generation is such a terrible product that they don't want to buy it," said Stephen Baker, a consumer technology analyst with research firm NPD Group.
And the life span of an iPad is significantly longer than Apple's biannual upgrades might suggest. IPads can be passed down over three or four years and to as many owners before ending up in the landfill.
"Everybody wants Apple products," Mr. Scarsella said. "Apple products just hold their demand really well."
First Published November 22, 2012 12:10 am