After handling the entire digital expression of your life for one, two, or more years, the most mercenary and practical end that a smartphone can meet is to be sold off secondhand. Wheeling and dealing with used personal electronics is not a new business, but in the last few years, it’s been writ very large with the glut of tiny hand-computers we’re all using lately.
Where those devices go after you sell them into wanting hands (Gazelle and NextWorth are two services that make their business on these transactions) has shifted a bit over the years. In the early days of the iPhone, companies were built on the activity of breaking down old iPhones into parts for repairing those still in use (or so some of the shadier companies claimed).
Per a report in The New York Times back in 2008, one company named PCS Wireless claimed that 94 to 95 percent of the second-hand phones it obtained were broken down into parts. The source claimed at the time that the screens alone could fetch $200.
The author of the NYT piece, however, suspected that a large number of resellers were unlocking the phones using less-than-sanctioned methods and then plying their wares overseas. While the iPhone is now internationally available alongside many other competing smartphones, at the time of the NYT article, the iPhone’s availability had only just been announced beyond the original six countries (US, UK, France, Germany, Ireland, and Austria).
Whether the NYT source’s original account was true or not, his cited ratio appears to have flipped. Despite the phone’s official availability in most parts of the developed world, reselling used smartphones remains a more popular activity than ever.
Unlike in the olden days, resellers are no longer so cloak-and-dagger about it. “Some products that we receive in large quantity are sold to wholesale partners, who aggregate these items and resell them via their own networks globally,” Gazelle states in its FAQ. Anthony Scarsella, chief gadget officer for Gazelle, told Ars that these wholesalers will also refurbish the phones when necessary.
Beyond that, the life of a second-hand iPhone is shifting sands. “We don’t ask where they’re selling them,” Scarsella said. He also wouldn't disclose the names of wholesale partners. But it’s possible to make some guesses about where many used iPhones are ending up based on where there may be unusually high demand. For instance, an iPhone 5 right now costs 2,299 Brazilian reals (just over $1,000) compared to the starting $649 price off-contract in the US.
A handful of effects are at play there, but the high in-store price is some combination of high taxes on imported electronics and inflated margins. Whatever the cause, that’s why your year-old iPhone might still net you around $400 in resale value: it could sell for twice that in another country and make a healthy profit while still beating the sticker price in an Apple store.
China is another country where fresh iPhones fetch high prices, and as a result, used ones can fetch relatively high prices, too. The new 32GB iPhone 5C that will cost $549 off-contract in the US is going for 5,288 Chinese yuan ($864) in the Chinese Apple store.
Companies that don’t cop to reselling either abroad or on their own eBay stores maintain a narrative about how they strictly recycle, which is also how resellers retire phones too broken to go on. This is a little-regulated practice in the US, though some states are starting to establish laws about how to do it safely. This potential legislation is motivated by stories of e-waste pileup in countries like Ghana, where electronics remains are also mined for gold.
Breaking used phones down into parts is not really done anymore (if it ever was). These days, smartphone parts sourcing is about as transparent a process as that of wholesalers reselling smartphones. All we know is the majority of them are coming from China.
Miroslav Djuric, chief information architect at iFixit, stated that in the early days, the company did break down old phones for parts. “Then you know for sure those are the official parts,” he said. But lately, his company deals with many companies in China that replicate those iPhone parts.
The parts could be sourced from Foxconn; Djuric didn’t know for sure. “People may tend to make agreements outside of normal operating hours… Sometimes they may be Foxconn parts themselves that disappear off the line. We don’t necessarily know… they’re all routed through second, third, fourth, fifth parties.”
Djuric said that finding good parts is not trivial, and iFixit has to “find the right company within China.” A factory might try to engage iFixit’s business and ship parts even if it is only equipped to support “a beachball company,” Djuric said (ah, the irony).
Time saved from deconstructing old iPhones to test shipments of parts from third parties now goes to extensive testing of all of the manufactured parts iFixit receives. “We have to scrutinize every shipment that comes in,” Djuric told Ars. That is lest a part wrecks the phone a user tries to install it in, and they have to sell it and send it on to a permanent vacation abroad.
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