Is there a second-hand iPhone buying sweet spot? Let’s find out!
Usually when purchasing a second-hand iPhone, I just wait until a device is available at my pre-determined price point, make a cash offer on Gumtree and get the device. However, one thing that I didn’t consider until now though (prompted by my Apple Watch Series 2 not getting watchOS 7 later this year) was whether I was buying devices efficiently from a software support point of view.
With Apple tending to support phones with the latest iOS version for 5 years, when is it most efficient to buy an iPhone when looking at price and expected support period? Just before software support is ending makes no sense to me and the idea of buying it at eye-watering full retail on launch is equally unappealing. Maybe we can model the price drop over time and find a sweet spot…
Find a nice dataset
Already there are issues. I don’t have access to years of historic iPhone Ads data on Gumtree and I can’t use the Wayback Machine because it doesn’t cache Gumtree search results. Also, I am really unwilling to scrape data for the next few years to build this dataset (because that would be against the TOS) so….
Give up and use whatever data you can find
..instead, I’m going to do this quick and dirty with whatever data I can find now. The iPhone 7 32Gb was launched at iStore with a price of R12999 on 14/10/2016 and now has a value of R5053 (average of 11 Gumtree ads) on 26/06/2020. Here’s that in a table..
..and here’s it (with datevalue on X-axis with initial prices normalized to 1 on Y-axis).
Having the price normalized like this makes it super easy to see that in ±4 years, the value has dropped to just under 40% of it’s initial price, great.
Now, let’s divide the expected years of support by the value of the device at yearly intervals et voilà:
That red line is what we’re interested in and the highest point on that line signifies the most support and cost efficient time to buy the device. This shows that the best time to buy is at launch at full retail. Uh, does this mean that I have to buy at full retail now? 🙁
BUT WAIT, I’M NOT CONCEDING SO QUICKLY. From my experience, iPhones don’t depreciate linearly so that above model is not ideal.
Let’s make this more complicated and see what happens
Time for more data. Once again, I’ve collected release pricing from iStore (Seen at dates before 26/06/2020) and an average of their currently listed prices on Gumtree (seen on 26/06/2020).
Hopefully I can use the straight line depreciation curves of multiple devices to build a composite “real” iPhone depreciation curve. If you have no idea what you just read, I won’t hold it against you.
Fancy graphs and unfounded manipulations
Like I did for the iPhone 7 on it’s own, I’m going to normalize all the prices and plot:
If you need labels, from the top to bottom at x = ±44000, iPhone 11 Pro, iPhone Xs, iPhone X, iPhone 7.
And now, using manipulations more gymnastic than a Katelyn Ohashi floor routine, I am able to take the individual models and build a composite (the red dots)
Now would you look at that, looks like the price decreases slowly and then drops in year 2, with the curve flattenning (couldn’t resist) after that.
And now let’s plot the cost-efficiency curve:
WELL WELL WELL, the red line peaks at 2 years after launch so it looks like buying an iPhone second-hand 2 years after release is most efficient, trailed closely by buying it brand new.
So I took a really sparse set of problematic data, heaped on top of it innumerable unmentioned assumptions and thus came to an unreliable conclusion (buying an iPhone second-hand 2 years after release is most efficient) that fit my personal narrative. So, did I just waste my time then? No, I do this stuff for fun! So, did I just waste your time then? Well, ideally I at least made you consider the support period of the devices you purchase rather than just their pricing.
I wouldn’t trust a device that’s not getting security updates with my banking, email, secure documents and the control of my home (and neither should you!). If you want help updating your devices, click here for Android and here for iOS. The latest versions as at 26/06/2020 are 10.0 (Android) and 13.5.1 (iOS).
If you work for Gumtree or if you’re a second hand dealer with a large dataset of iPhone prices (especially actual selling prices) over time, please send me your dataset! I would love to re-do this analysis properly.
If you have any questions/would like to share your experience with modelling iPhone pricing please leave a reply below. Thanks for reading!