The thing with lumping all 'Android' together is that it gives the wrong picture. Similar to lumping all PCs.
When you buy anything non-Apple, you have to be a smart buyer. This can be good or bad, depending on your world view.
If you compare premium non-Apple brands, they compare favoribly to Apple. For example, my Nexus S was $300 off contract (brand new). This is much cheaper than the comparable iPhone 4 at that time, retains good resale value, and will probably be fast enough/supported for as long as the iPhone 4. On the PC side, ThinkPad T/X series offers similar (or even better!) reliability/cost effectiveness/resale value to MacBooks. For example, the x220 series configured new at lenovo will cost ~1000. Current resale puts it at around 800, which is better than the MBP (for e.g. base at $1249, refurb @ apple for $1049, and resale at around $950).
Even if you break out Samsung, Motorola, HTC, etc. you will still have the same problem within each manufacturer's lineup. Comparing individual phone models is logical but nobody does it for some reason.
It seems that people always want to compare the iPhone (a single hardware line) to Android (software) which is just bizarre.
Resale value is also being measured as a percentage MSRP, which makes sense for the iPhone, as it isn't really available for anything but MSRP, but isn't as realistic for most Android phones that can often be had for less than MSRP.
Problematic it may be, but I wouldn't call it "bizarre". The fact that the iPhone has a single line of hardware evolution, a single line of software evolution, and an extremely straightforward product line at any given time is a very deliberate branding and marketing decision by Apple, aimed at avoiding exactly the situation we see in the rest of the phone market: The marketplace is a confusing zoo in which the available mix of models changes every five minutes and nobody knows what they're buying unless they have the data sheet sitting open in front of them.
I'd get the MBA over either the MBP or x220. Thinness, SSD in all models, a UNIXish OS which actually runs some non-free software (and doesn't have people ask you what the hell is wrong with your computer), a crisp screen (the MBA has the same resolution as the 15" MBP) ... sorry, us MBA people are the most annoying Apple fanboys, right?
The only laptops I've seen which I've been at all envious of are later-model MBAs, and Toshiba's Satellite Z830 (damn that thing's light).
But if you don't mind a heavy laptop, the x220 does look nice. 15 hours video (with the $180 battery hump thing) definitely raises the bar.
I have this year's MBA. Its pretty good, except for the 4 gigs of ram. I find the the T/X series more ergonomic for longer periods of typing though (matte screen + plastic wrist rest is more comfortable).
The T/X run well with linux, so you get all free software ;-) Also, the x220 is 3.3 lbs [1][2] vs 2.96 lb [3] for the air.
I stopped giving a shit what other people think of my computer when a pretty girl told me my NetBSD laptop was "not digital enough" and I needed to buy a Mac because it was "more digital".
If you compare premium non-Apple brands, they compare favoribly to Apple.
Since I'm not aware of a single Android phone that sells for more after two years than the full price two years prior, I'm not sure how any can compare "favorably" (limited run developer models excluded).
>Since I'm not aware of a single Android phone that sells for more after two years than the full price two years prior
Pretty sure absolutely no phone sells for more than the full initial price, iPhone included. Remember, the price you see in ads are carrier subsidized, an actual new iPhone is approximately $650 without a contract.
On that note, I just bought an AT&T iPhone 4 for $250 a month ago. Not bad of a deal for 18 months later.
Per notes elsewhere in this thread, I sold each (original, 3g, 3gs, 4) on eBay for more than full price, after the next model was out. I did unlock them before sale.
> At Priceonomics, we firmly believe that resale value is the best objective indicator of product quality.
Really? It might be a decent indicator of product quality relative to other products on the market, but even then, plenty of extrinsic factors - from speculative bubbles to the lack of knowledge of longer-term product quality - can influence the perceptions of relative value that drive market prices.
That aside, how indicative of the overall market for phones is the specific segment of those who buy second-hand phones? Unlike houses or cars, few people actually buy used phones, and those who buy new phones aren't usually thinking about resale price at their initial time of purchase.
Does resale price really say a lot about the underlying product quality of a mobile phone?
High resale value seems like it would correlate most strongly with high initial cost and high popularity - more people would prefer to buy a used one if the initial cost is higher since they can't afford the initial cost, so both increase the demand. Android/Blackberry popularity is spread over many more models than the iPhone, and are usually cheaper.
"We firmly believe", on the other hand, is not an indicator of anything. "We've defined quality in such a way that" would be more apt - quality is a hard-to-define term, and they don't even try.
One explanation: The rapid rate of change in Android phones vs Iphones?
Consider if a car company released 4 model updates per year instead of one.
Your Hyandai 2013 Quarter 1 would depreciate faster as the 3 newer models came out (granted that each new model would have more/better features - heated seats, leather, auto drive, whatever).
So as an iPhone buyer/owner, you know your phone will be state of the art for foreseeable future, where as with Android, you phone will be (perceived anyway) as antiquated, much more rapidly.
20 months ago, I paid a lot of money for my Android phone when I signed on for a three year contract. Just a couple of weeks ago, my wife replaced her phone and got an Android phone for free with her contract. Her phone is lighter, faster and slicker than mine and has significantly longer battery life.
That in itself can explain the depreciation rate: new Android phones are so much better and cheaper than old Android phones that the old ones can't compete except at a very low price point.
This has been a problem in the (US) wireless industry for a very long time, long before Android. OEMs have always been more than happy to make 4 variations of the same phone for 4 carriers with 4 different names; putting Android on everything simply makes the problem that much more obvious. HTC was the worst offender for a time, even forgoing their own branding for the carrier's.
It'd help the situation much if OEMs simply made ~4 models (not counting radio configs) every year, and stuck with them across carriers. Moto, for instance, would have:
Can you explain how it's different than 4 car companies releasing once a year?
Android's plunging prices are not really a depreciation of the hardware value, but rather an indication of the rapid pace of the software - well, I'm ignoring fragmentation for the sake of argument. Like you said, "antiquated, much more rapidly," but not by specs - by software features. Example: Ice Cream Sandwich is slowly becoming available.
The iPhone lives off in its little garden - I agree that "you know your phone will be state of the art for foreseeable future." Apple strives to maintain vertical integration, so their software moves slowly. It's lock-stepping with their hardware. Hardware innovation generally moves at a steady, predictable pace.
Why does it matter that Android's value is more closely tied to the software? That's Google's area of expertise. They've tried to make the hardware a commodity. If it doesn't end up fragmenting so badly consumers start leaving (and I don't think they will) -- then the hardware will not garner the big margins. The software will (under Google's control, hopefully monetizable by them).
Software innovation can be more volatile, but especially for mobile phones it can be what sets you apart. Arguably, Apple has the software edge - hence, Android's furious pace.
"At Priceonomics, we firmly believe that resale value is the best objective indicator of product quality."
I may have missed something, but given that prices are supposed to reflect the supply vs demand ratio (in a sane market), how can they end up "firmly" believing that resale value is an objective indicator for quality ?
Because they like Apple and have some "data" that shows Apple is better. The only missing piece is how that data makes Apple better, and that's what this statement is for.
For the same reason that having only one car available won't make people pay exorbitant sums of money for it. People pay what they perceive the item is worth, typically based on quality. Sure, some people will always buy the cheapest car (or phone), but most people want a phone that will last. They'll pay a little more for a car/phone that will last longer.
The lesson here is to buy used phones outright for cheap and hasten the decline of carrier lock-in. That's what I got out of the article at least.
The difference in depreciation between iphones and androud seemed pretty small to me, and probably represents the overall inflated price of the half-eaten fruit logo. I see laptops on craigslist with similar specs: $2000 for Mac and ~$500 for Dell. Like Billy Beane, I buy cheap and undervalued.
I have got the exact opposite lesson: a 1 year old iPhone has lost 25% of its value, and it loses another 25% of the original value the next year. So you lose the same amount with an older phone
In other words - imagine a rich person buying a new iPhone every year and selling the old one to his poor friend. Both of them eventually pay the same amount for the phone, but the poor friend got a used one.
I think you might be misreading the graphs. According to the article a 1 year old iPhone depreciates by about 40%, and a 2 year old iPhone depreciates by around 65-70%.
Thus, a person selling their 1 year old iPhone would fail to recoup 40% of the sticker price overall while someone buying 1 year old phones and selling them a year later would fail to recoup all but 25% of the sticker price, give or take.
"Our data suggests that buying an iPhone is a better economic decision"
Wow, what a leap. Is the author aware the purchasing a phone for resale value is actually NOT the main reason to purchase a smartphone? Any article that starts by quoting MG Siegler should immediately be discounted anyway.
It's an interesting analysis, but I don't see how the results would affect my buying decision at all. What's the actual dollar amount difference in reselling an iPhone for 53% of original price vs Android at 42%? Maybe $50-$80? How much in carrier fees have I spent over that 18 months? Well over $1000.
The difference in resale value versus the entire expense of owning these phones is insignificant. Or at least it's not significant enough to outweigh the preference one might have for a given phone. What if the numbers were flipped? How many iPhone owners would choose to switch to Android if they knew they could save $70 over the next year and a half?
They lost me with this: Skip those extra GBs on your iPhone. An additional 8GB of hard drive costs you an extra $100 upfront but only adds $10 to the resale value of your phone. The secondary market doesn't value extra hard drive space on an iPhone, so get the one with the smallest amount of disk space.
Hey fellas - there is more to a phone than resale value. If you're only thinking about how much you can sell it for at the end of possession, then I think I'll give your review a skip.
Looking at that particular quote is a bit weird for me. I bought a second-hand Honda from a Mercedes dealership (obviously a trade-in), and the one thing the merc salesdude kept rabbiting on about was how reliable and mechanically sound Hondas are. I guess it depends on where you focus your 'attention to detail' :)
(The car has been pretty robust, and yes, the passenger capsule wouldn't be as nice as in a merc... but then again, when new these things go for half the price of a merc)
I always hate the argument that phone costs don't matter because carrier costs are so high. You have to pay the carrier cost anyway. Service is a fixed cost, the phone is the variable cost. The only time carrier costs should be added into the equation is when you have to buy an "iPhone" plan that costs more or less than the comparable "smartphone" plan.
If your choice of smartphone doesn't change the cost paid to the carrier over the term of a contract, the data point is useless.
I stopped reselling my electronics and just give them away to whomever needs them - somehow, that's less depressing than knowing I bought something for $500 and now I sell it for $100 (and my stuff looks like new even after years of use).
Buying used smartphones, on the other hand, is great - you can get a G2X or a Dell Venue Pro (excellent Windows 7 phone) for under $300 easily, and it will work just as well as any other phone (especially the G2X with a custom ROM)...
"At Priceonomics, we firmly believe that resale value is the best objective indicator of product quality."
I'd say it indicates the speed of improvement--whether quality has topped out, or is still improving.
Resale value for a hammer in a year migh be close to 100% of its original value. It might be used and scratched, but it still works as new, and there aren't any new revolutionary hammers out on market. Same with DSLR lenses, for example.
Top end MTB bikes are of very high quality, a joy to ride. But they depreciate sometimes by 50% in a year: new models are out, lighter, stronger, better-handling and everyone wants to upgrade.
Top end MTB bikes are of very high quality, a joy to ride. But they depreciate sometimes by 50% in a year: new models are out, lighter, stronger, better-handling and everyone wants to upgrade.
be careful. Some high-end MTB brands depreciate more than others, which is the exact point this article is promoting about phones.
And I'm saying it might be not because of difference in immediate quality, but because some brands have found their working formula and slowed down experimenting, while others continue cranking out new stuff.
Brooks saddles look the same, act the same and cost the same now as 20 years ago. A saddle that has been sitting in warehouse for 5 years would probably have about the same market value as saddle made this year. I'm no Brooks expert but that's the impression I get.
Shimano on the other hand updates its component groups each year. Their products are highly evolved already, but still they find things to improve. So people upgrade.
I realize this isn't quite the point of the article, but I have a $29.99 Nokia phone I've been using for years and I'm pretty sure I can resell it for at least $20. Non-smart phones hold their value best of all.
i've found that nokias sell well second hand. i wouldn't recommend an iphone second hand as they are much more fragile than old solid nokias. i've seen a number of iphones that the mic or wifi no longer works on and knowing the users i don't think they abused the devices that much.
It's pretty amazing that we pay ~$90 a month to Verizon but only ~$13 a month to Apple. Intuitively it feels that Apple is the one creating most of the value.
> Verizon and rivals such as AT&T Inc. sell the Apple Inc. (AAPL) iPhone and other smartphones at a loss as they compete to get customers to sign up for contracts that typically run for two years.
Verizon et al, run a 24x7 data/voice nationwide network.
That involves constant physical construction and capital investment.
Apple is the clear winner, selling their product at a premium with the middle man subsidizing the consumer's purchase price.
Putting up 1,000s of cell phone towers isn't exactly cheap and it's not like you can get it done in another country because it has to be done in your home country.
I've sold each model iPhone to date for more than I paid for it, even when paying full (unlocked) rate. Apparently people consider there to be significant value in a no contract phone.
Turns out that the secondary market for the iPhone is nearly as robust as the primary market. And it’s growing steadily larger and more important for Apple’s carrier partners, and for Apple itself.
No doubt there is a robust resale market for iPhones, but if I'm not mistaken, this article fails to take into account initial subsidized market prices when making it's lifetime value calculations. Yes, iPhones are subsidized too, but not completely; whereas most Android phones are not subject to the same price-fixing policies, and can be purchased via authorized Verizon, AT&T, Sprint, or T-Mobile resellers at significant discounts. In fact, 90% of Android phones -- even those with unsubsidized price tags of $500 -- can be purchased for FREE (or sometimes $.01) with a contract from a carrier-authorized retailer such as Amazon or Wirefly. So yes, if you walk into the Verizon store and pay $200 for a Droid 3, your lifetime cost may end up being higher than an iPhone. But if you have a brain, and get your Droid 3 from an authorized Verizon dealer, you pay $0 for the exact same product, and the math shifts rather quickly.
The iphone is an ipod touch on the secondary market. But a used Android phone looks pretty much useless to most people, especially when you can get a new phone for free or cheap. The Google Galaxy Nexus is now $99 on Amazon Wireless -- quite a bit cheaper than any comparable iphone. It's interesting that we used to throw away cell phones but now they have value.
I have an EVO 4G from Sprint. It's less than 2 years old (still on the original contract) but it's been EOL'd by Sprint. What's funny is that you can still buy it from them, get a new contract for 2 years starting from now, but they've already guaranteed that there will be no updates for it anymore.
This is an incredibly interesting article though I would urge you to include some methodology. With some proper evidence behind these bold statements, you'd be making headlines at TechCrunch (you still might anyways)!
also this line "Never trust anyone under 30 with a BlackBerry.”
So now we're supposed to judge something as complex as a person's trustworthiness based on their consumerist choices? I understand it's meant to be taken as an offbeat joke but as humorous as it's meant to be, statements like that make me feel troubled and mildly depressed. I'd really not like people to define me based on what phone I have :( Let's just have a beer and talk instead :\
i think that variance is pretty crucial in this case. With iphones you always have a high end device whereas the quality of android phones differ greatly. i would still expect iphone to come out the best but still a comparison to samsung galaxies would make more sense
You got lucky with a seriously naive buyer. Going by VZ's listed (usually inflated) price, the Incredible 2[1] goes for $430 brand new; so your buyer either thought your hacking was worth the $200 (at least) premium or just failed to do research.
I would hesitate to buy a used phone because these things like phones and computer keyboards and mice that people constantly handle have the highest level of germs, and getting germs and grease and stuff out of the various nooks and crannies without damaging the electronics looks hard.
That's an insane reason. Just by being in the same room as other people you expose yourself to more germs than you would by touching a used and cleaned phone.
I have seen news reports of studies done by public-health researchers who worry about computer keyboards and phones after measurements showed surprisingly high numbers germs on these items.
It might be that the researchers were worried only about germs that can survive for only a few days or cannot survive the type of cleaning achievable without completely disassembling the phone, but it is not obvious to me that that is the case. For example, one hears about these biofilms that allow germs to survive for very long times.
What are your reasons for believing that just being in the same room as other people exposes a person to more germs?
When you buy anything non-Apple, you have to be a smart buyer. This can be good or bad, depending on your world view.
If you compare premium non-Apple brands, they compare favoribly to Apple. For example, my Nexus S was $300 off contract (brand new). This is much cheaper than the comparable iPhone 4 at that time, retains good resale value, and will probably be fast enough/supported for as long as the iPhone 4. On the PC side, ThinkPad T/X series offers similar (or even better!) reliability/cost effectiveness/resale value to MacBooks. For example, the x220 series configured new at lenovo will cost ~1000. Current resale puts it at around 800, which is better than the MBP (for e.g. base at $1249, refurb @ apple for $1049, and resale at around $950).