Apple vs Everything else : The high re-sale value of Apple products

Savvy smartphone owners know that trading in their existing smartphone can help finance the purchase of their next device.

This is especially true of Apple iPhone owners. But what about Google Android users? Samsung has seen great success with its high-end Galaxy series of smartphones. These phones typically costs as much or sometimes more than the Apple iPhone when they’re first introduced. Do these devices hold their value as well as the iPhone when it comes to reselling them?

The simple answer is no. Apple products always have a higher resale value even if its marginal. ALWAYS. And to understand why, we should get really deep into just one of the two things. The first is simple, there is only one company that sells iOS/MacOS, Apple. and there is only one upgrade in one year and sometimes not even that as is the case for Macs. On the android and windows side, There are constantly better products coming out competing within the same ecosystem. Samsung does its best but then HTC or Lg would come out with something better for example. The second also simple but quite deep reason is the divide between ‘Apple’ and ‘Everything else’. Just look at this promotional picture here. Really. Look.

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“What makes an iPhone unlike anything else? Maybe it’s that it can do many things. Or that it lets you do so many things so easily. Those are two reasons iPhone owners say they love their iPhone. But there are many others as well.”

A lot of people would realize how non-informative and sort of meaningless those lines are. Its like listening to a Donald Trump speech. But many also will fall victims to the psychological effect it creates in one’s subconscious. Marketing. Which both Apple and Trump know.

The split between the ever-pricey, ever-coveted, newly chamfered iPhone and everything else is glaring: The iPhone is universally considered good. A lot more Android phones are considered good enough—or, more to the point, good enough for what they cost. And it’s that trait more than any new feature that’s guaranteeing Google its role as Phonemaker of The People, a democratic gadget, while Apple succeeds only in cementing its grandfathered slot in the gilded pockets of the overly-discerning overclass.

From the day it slipped out of Steve Jobs’ womb and onto credit card bills, the iPhone was a dearly coveted bourgeois object. It was expensive, fancy without ostentation, and the semi-affluent white people loved it like their own progeny. It is the phone of actors, models, rappers, academics, and graphic designers living beyond their means. There’s never in history been an electronic class beacon so clear as the iPhone—remember how expensive it was when it launched?

A measly 4 GB model set you back $500, and the 8 GB version was $600. With a two-year contract. That didn’t stop Apple from selling hundreds of thousands of them out of the gate—so many that AT&T’s servers crashed under activation pressures.

Then Google sold its own touchscreen smartphone for around $200, the first Android handset of all time, and no one except geeks of the tightest niche gave a damn.

But today the tables aren’t just turned—they’ve been flipped over and turned into firewood. Android phones dominate Apple across the world. And while Android has finally come into its own as a sophisticated, refined mobile OS that deserves to be purchased in large numbers, Android isn’t winning just on merit. Phones like the Nexus 6p and Galaxy S7 edge are tremendous as both pieces of hardware and containers for smart, thoughtful software. Each is a pleasure to use, but that’s not Android’s sharpest knife.

Android’s success isn’t really about these phones. It’s about the Xiaomi Redmi Note 3, Lenovo Moto G4, and Huawei Honor 5c—which retail for $220, $299.98 and $155 respectively. It’s about the countless marginal, middling phones that can be sold like bags of Doritos or bargain-bin sweaters—they’re priced to move, not priced to be ogled at or aspired towards. And it’s working.

The last study conducted by the Pew Research Center’s Internet & American Life Project shows that Android is the chosen smartphone of people without money. Among respondents, 22-percent of those with annual incomes below $30,000 were Android owners, as opposed to just 12 percent for iPhone. With those towards the lower-middle class, the trend holds: Android owns 23-percent of incomes up to $50,000, with iPhones at 18. The data makes it clear: the less money you have, the more likely you are to opt for an Android phone over something more expensive.

And it’s not purely an income game—other socioeconomic factors that correlate heavily with the amount of money you’ve got in your pocket line up perfectly. Federal census data pegs black and hispanic households at median income (and ergo spending) levels tens of thousands of dollars below their white peers—and statistically, those same households are going Android at higher rates. A full 12-percent more black and hispanic smartphone users are Android users compared to Apple customers, and owners of any race with a high school diploma or less made up 38-percent of Android owners, over iPhone’s 31-percent mark in that cohort.

This is no accident.

Even Asian corporate giants like Samsung are trying to lure more lower-earning buyers. As NBC’s Griotnews site pointed out late in 2012,

[Samsung’s] new commercial, titled “Family Photo,” features a mostly African-American family attempting to take a holiday portrait with the new Samsung’s Galaxy Note II…”Family Photo” isn’t the first attempt that Samsung has made to showcase African-Americans in their ads. Sports Illustrated‘s Sportsman of the Year LeBron James was featured in a series of Galaxy Note II commercials in November that gave a snapshot into Miami’s black urban community. With his Galaxy II in hand, LeBron gives a tour of his day-to-day activities in the ad, which include breakfast in his lavish Miami home, a stop at an urban street food truck, a haircut at the local black barber shop and finally a Miami Heat’s game.

Indeed, Samsung may have the right idea to target African-Americans, who happen to be one of the fastest growing demographic within the smart phone market.

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In the meantime, Apple’s closest stabs at diversity star the universally-beloved Samuel L. Jackson eating gazpacho and the Williams sisters playing ping pong. Black people, but massively wealthy black people. Beyond that, it’s a nebula of pale-handed closeups and consummate white human being Zooey Deschanel.

Apple won’t play this game. Partly because it’s too stubborn (or too smart) to undercut the likes of HTC and Motorola and hit buyers for whom the price of entry matters more than almost anything. Maybe it’s what keeps up the iPhone Mystique. Maybe it’s good business. Maybe it’s both. But iPhones have always been the expensive alternative to an Android, and there’s no reason to think the company will tack away from that status.

Android makers aren’t beholden like that. Manufacturers are free to use Android, pay nothing to Google, and then pass on that massive savings to consumers in the form of cheap-o handsets. Most of them are pretty chintzy, slow, and generally bad, but they’re still smartphones. For millions upon millions, that’s more than good enough; not everyone needs top-of-the-line. Cheap Android will still run Instagram, still check Twitter, still play music and read email. We might turn our nose up at this—who would ever get anything but the best phone with the biggest screen? You use a handset with fewer than two cores?But that’s a low echo from the nerdy silicon tower: A lot of people can’t afford a $200 or $300 phone, and won’t ever be able to. A lot of people just want the basics—no need for the spiff of retina display or LTE—and only want to put up what it costs to get in the door.

The divide also happens for two more, maybe two and a half, reasons. First, there are just too damn many of everything but Apple products, and Apple’s done a good job of cultivating a “Buy Apple or Buy Something Else” mentality. That’s the supply part. The other reason, not surprisingly, is demand. Both demand for the entire Apple “half” of that equation, and just as importantly, demand overseas, where Apple products often aren’t as readily available.

If you’ve ever tried to sell your old PC or laptop, you know that first reason to be true. And that’s not because of the quality of hardware anymore (though in the past, that sure didn’t help). It’s the configurations. “More choice is never a bad thing,” you might see shouted on an all caps in an Android or Windows or Linux comments section. Except, that’s extremely not true when it comes to resale.

Thankfully, that’s already changing. Android phones have seen a nominal amount of consolidation. There are still a ton of phones and tablets coming out, but most of the premium lines have whittled down to just one “hero” phone. Still, that means HTC competing with Samsung competing with Huawei competing LG for space in humanity’s brain pans, while at the same time competing with lower-priced Android models. This is how a platform like Android wins the market share war, but it’s not a recipe for strong resales.

PCs are in the same bind. All the OEMs like Lenovo and Acer and Samsung and Dell are focusing on premium lines with just a few products. And they’re really damn nice, too. The Acer S7 11-inch is lust-worthy. Ditto the Samsung Series 9, Lenovo Yoga, and Dell XPS 13. The All-in-One lines are getting there too, running basically neck-and-neck with iMacs now. But they’re all still just “Windows laptops” or “Windows desktops” to most folks.

It’ll take years for this dynamic to change. The design and build from Windows and Android and even Windows Phone OEMs is right there. But public perception can trail five or ten years, and even then, without a clear winner (like, say, a Microsoft Surface Laptop) they’ll still have to deal with Spam vs. Apple.

Forget prestige. Just get people signed up. Apple might remain the most valuable company in the entire hoary history of capitalism, but Google’s playing the long con. As long as Android can keep feeding itself to companies and drive budget electronics, it’ll have its foot on the iPhone’s throat as a populist standby.

One thought on “Apple vs Everything else : The high re-sale value of Apple products

  1. Pingback: Windows 10, Android, iOS, and the billion user question | Verdict

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