eBay iPhone Worldwide Listings Skyrocket - First 3G $1,500 Listings Appear

As predicted, eBay iphone listings jumped dramatically the day before and day of Apple's 3G release. The vast majority of the increase is clearly from the non-gray market--Apple customers who are selling their first generation iPhones to pay for the 3G version.

But there's clearly a second group of iPhone buyers who are willing to pay $450-$650 for unlocked 8GB and 16GB USED first generation iPhones. Since all iPhone owners will benefit from software version two just released by Apple, the lure of an unlocked iPhone that operates on most GSM carrier networks far exceeds the perceived value of higher download data speed and GPS. The shortage of unlocked iPhones (just over 30%) is also driving prices higher.

The locked iPhones listed in the past 48 hours may be a litmus test for Apple and AT&T in the U.S. Sellers of these used locked phones will most likely sell at substantial discounts over unlocked ones. Sellers may also find it difficult to sell the locked units unless buyers are willing to purchase the unlocking software.

Despite buyer proclivity to pay higher prices for used iPhones, the iPhone, in my eBay experience, is the first smartphone to maintain high perceived value and final selling price. Until now, most used mobile phones on eBay have sold at significant discounts from new ones.

Scalpers began appearing during the 3G launch, attempting to sell the first 3G units in the $1,000-$1,500 price range with Buy It Now, and auction bidders quickly began bidding up 3G iPhone offers close to BIN prices.

Here are the eBay iPhone stats as of Friday, 7/11 @ 10 p.m. Pacific on eBay Worldwide. Keep in mind that other sellers around the world are also selling unlocked iPhones. eBay is only indicative of trends.

• Total iPhone listings reached an unprecedented 4,000+ units *
  
  
  • Used = 3,461 (86%)
    
    
  • Unlocked = 1,453 (36%)
    
    
  • 16GB Units = 1,776 (42%) - Percentages in this breakdown based on 4,247 units
    
  • -8GB Units = 2,151 (51%)
    
  • -4GB Units = 330 (8%)
    
    
  • Selling at Auction = 3,522 (75%) - Percentages based on 4,674 units
    
  • Buy It Now = 1,052 (23%)
    
  • Best Offer - 100 (2%)
    
    
  • Free Shipping = 1,031 (22% - Unusually high)
    
  
  
• 3G iPhones = 410 (10% - 2/3 16GB models - based on 4,000 units )
  
  
  • -210 already have 10+ bids
  • -29 claimed as "unlocked" already by sellers

As of 10 p.m. tonight, eBay worldwide shows 63,879 total cell phone listings. iPhone listings remain a drop in a very big mobile phone puddle.

* Disparity in the numbers is due to spurious numbers by one lot seller and eBay including accessories in the cell phone & PDA category. To calculate the percentages, I used the advanced search feature in eBay, tried to account for approximately 1,000 units for sale by the lot seller and disregarded any accessories or software included in the wrong category.

iPhone Dumping Continues on eBay: Sellers Worry Over 3G

Apple released its promotional Apple 3G video today, touting the improvements of the 3G iPhone. Meanwhile, rabid dumping of iPhones on eBay continues unabated. Some sellers have resorted to "Sayn Design" gold 16 GB iPhones, selling in lots of 10 for $8,500.

While calculating total iPhones for sale on eBay is time consuming, due to CECT, HTC and other's including "iphone" in the listings, here are my best estimates of iPhones for sale on eBay worldwide as of July 1st, just 10 days before Apple releases the 3G version.

Total iPhones = 2,800 (800 in lots, mostly the 16GB "gold" version)

Total Unlocked = 2,500+ (very few locked iPhones are now available as 3G approaches)

16GB Model = 1,300

8 GB Model = 1,000 (few in lots)

4 GB Model = 139

The total number of iPhones clearly doesn't total 2,800, due to listing in a category other than "cell phones & PDA's" and unclear listings about number of units.

The BIG change: According to my estimates, 90% of iPhones advertised in the past week SOLD, compared to 30% two months ago before the 3G announcement. iPhones sold through other non-eBay stores, I believe, raise the total dumping above 3,000 units.

When July 11th hits, there's no reason to believe that iPhone unlocking and re-selling through unauthorized channels will continue. Demand for unlocked units is so high that the total 8GB price of $199 + $36 activation + $175 early termination fee + $30 unlocking ($440) will not dissuade continued out-of-channel sales.

As I pointed out in an earlier post, this will hurt AT&T the most in the U.S., but will impact international carriers as well, as unlocked iPhone purchasers break contracts and purchase multiple SIM's to obtain cheaper rates in European countries and elsewhere around the world.

Moreover, with over 300,000+ unlocked iPhones already operating on China Mobile, iPhone use will rise as additional unlocked 3G units become available in the open market.

While China Mobile never signed an agreement with Apple and will benefit from further activations, other international carriers and AT&T in the U.S. will experience higher initial financial losses than expected through the subsidy. T-Mobile's emerging 3G network in the U.S. will also eat into AT&T profits as it aggressively rolls out its broadband network and iPhone users switch to T-Mobile.

Laughing all the way to the bank will be Apple, which finally realized selling iPhones at high margins, as with Macs, will bring home the bacon.

Worldwide iPhone eBay Listings Rise: The Glutting Continues

iPhone eBay sales continue to rise as buyers purchase new ones and sellers ditch the 4GB and 8GB models, possibly for purchase of Apple's 16GB model. (Since one aggregator, selling around 500 units, is grouped separately, the stats are based on best estimates.)

Listings as of March 31, 2008 on eBay Worldwide show:

• 2,712 total iPhone listings (based on "cell phone," "smartphone," and "PDA" categories)
  
• 72% of iPhones are listed as "new"
• 16GB Model = 811 Units--30% of all iPhone listings, a dramatic increase since MTM's last tally
  
• 8GB Model = 1,713 (63%)
• 4GB Model = 188 (7%)
• Approximately 74% (2,000 units) are unlocked, with sellers claiming 1.1.4 firmware updates
• Quality of eBay listings varies from professional to poor, although pictures and phone descriptions are improving. Some sellers continue listing damaged iPhones as the picture above shows.
  
• More "free" iPhone listings appear in auctions whose winners are instructed how to obtain a "free" iPhone. The legitimacy of these listings is questionable.

In comparison, eBay Worldwide lists:

• 151 Nokia N95-8GB Smartphones (121 New)
  
• 66 Sony Ericsson's selling for $400+ (62 New)
  
• 75 Samsung's listed at $400+ (68 New)
  
• 66 LG's priced at $400+ (45 New)
  

Compared to Nokia and other smartphone manufacturers, the gray market glutting of iPhones continues rising on eBay Worldwide. There are now 18 times more iPhones for sale than the Nokia N95-8GB, the closest iPhone-comparable smartphone.

eBay iPhone Sales Continue Climbing Amid Buyer Confusion

eBay iPhone listings, although difficult to ascertain due to sellers using multiple categories, appear to have risen to 3,410. (This number, to the best of my ability, doesn't represent lots.)

Latest eBay worldwide summary:

• 3,410 total listings (again, most are single units, some are multiples).
• Around 600 of the 3,410 listings appear under two sellers who are acting as "aggregators." When clicking on these two listings, individual seller listings appear.
• 334 iPhone sellers claim their phones are "used," the rest "new," although many sellers continue to list their iPhones as "new" because they were "just used for a week or month." These are clearly "used" iPhones.
• 1,459 of the 3,410 are "unlocked"--43% of the total with sellers claiming that, of these, 92% are "new."
• Average sale price of "new" units overall is $528 (skewed by large numbers of iPhones for sale and 16GB iPhones that are growing rapidly on eBay)
• Average sale price of "used" units overall is $380, a significant drop from my observations during the past few weeks.

The accuracy of the total number of iPhones for sale on eBay is impacted by sellers listing in multiple categories. By far, most sellers are listing under "cell phones." But others are listing under "smartphones" and "PDA's. The majority of sellers listing under "lots" represent iPhone accessories. I doubt that many individual eBay sellers are listing in multiple categories due to the extra listing fees.

After reviewing several pages in all categories, I conclude the following:

• The vast majority of unlocked iPhone sales--new or used--reflects problems or confusion over 1.1.2 to 1.1.3 firmware issues. In many listings, sellers warn buyers not to sync with iTunes to avoid re-locking the phones. This alerts buyers who are becoming concerned about how unlocking affects iPhone functionality.
• Most sellers are listing single units, many used, from weeks to several months, indicating that buyers and sellers are becoming concerned about unlocking issues or dissatisfied with their initial purchases.
• 50%+ of of all iPhone sellers don't reveal why they're selling.
• Of those who do reveal,  a growing number of sellers claim they've bought 16GB units and therefore are selling their 4GB and 8GB models.
• The remaining sellers who reveal their reasons for selling say they are still under contract or have switched to other carriers, their companies bought them phones, relatives purchased a second iPhone as a gift plus other reasons. The validity of the claims is spurious.
• Most eBay iPhone sales listings look unprofessional. Photos, if taken, are blurred and item descriptions are hazy. Many iPhone sellers clearly don't know how to write an effective eBay listing. As a result, many of the listings I reviewed were incomplete and unconvincing.

I continue to believe the growing number of iPhone eBay listings represents a significant marketing challenge for Apple. Viewing blurred photos of scratched, unlocked iPhones and cut-off SIMS is the antithesis of Apple's slick advertising campaign.

iPhone Sales on eBay USA

MTM reported on Apple's iPhone marketing challenges recently--specifically, the number of unlocked iPhones for sale on eBay USA. Today, I reviewed iPhone sales developments on eBay USA and discovered some interesting stats:

• As of February 16, 2008, there are 3,627 iPhones for sale (auctions and Buy It Now)
  
  
• Of the 3,627, 1,154 are locked to AT&T and other Apple approved carriers and 2,473 (68%) are unlocked. 702 unlocked iPhones were for sale during my last count.
  
  
• Looking at the most recent completed sales (I used averages from the first three listing pages)
  
  
• 65% of all iPhones sold while 35% did not.
• 67% of all unlocked iPhones sold; 33% did not

Observations:

• The 16GB iPhones have hit eBay, potentially lowering the closing prices of 8GB models.
  
  
• Over a third of all iPhones don't sell on eBay with the first listing, whether locked or unlocked, forcing sellers to re-list. iPhone buyers may also be waiting for the 16GB model or purchasing their iPhones through authorized channels.
  
  
• The number of unlocked iPhones is skyrocketing rapidly.
  
  
• More than a third of all iPhones listed on eBay are used, possibly revealing product dissatisfaction.
  
  
• Only a few sellers are engaged in large lot sales of 50+, but a growing number of sellers are offering up to 5 units, the maximum number obtainable from an Apple store in a single visit.
  
  
• Buyers who purchase unlocked phones are willing to pay a premium of $100 or more rather than use unlocking services. Most unlocking service listings I counted did not sell.
  
  

As Apple seeks additional international carriers to market iPhones, its marketers need to better understand the gray market for distribution of this mobile device.

TechForward's Pricing Strategy: Cash Floats and OPM

The San Jose Mercury's article today on TechForward, a Los Angeles-based company that buys back your used consumer electronics devices, reinforces how gadget-oriented we've become. TechForward's pricing strategy for the new service is a way for consumers to own the latest in consumer technology--the same strategy used in leasing, rather than buying, a new car. The value of the gadgets in our lives varies from day-to-day. I've seen smartphones on eBay, for example, priced at over $500 one week and sell for $400 or less the following week. It's a very slippery market that will intensify in the cellular industry this year, as Google's Android initiative generates waves of new mobile devices, features and applications. Consider GPS and Wi-Fi on mobile devices. Before these features were available on mobile devices, they never determined cell phone pricing. Now that they're become commonplace on mobile devices, such as the iPhone, Nokia's N95 and RIM's BlackBerry 8800 series devices, they raise mobile device value while decrease re-sale prices. TF's pricing strategy makes sense. The consumer must pay a fee upfront to TF for each new device. Second, the buyback amount--whether mobile devices or computers--appears extremely low, even if the item is only three months old. Third, TF determines the item's condition to determine the buy-back price. Scratched and battered consumer elecronics gadgets don't sell, and TF will probably send customers a lot of $20 gift cards for virtually worthless items. Last, getting your check takes up to 60 days, revealing TF's main pricing strategy--floating cash to build TF's business, invest and sell in lots in the wholesale market, including eBay itself. It's the same marketing strategy as PayPal and other financial companies, based on the OPM philosophy of using other people's money. For further information, check out TechFoward's website.