The iPhone 16 Is Breaking Pricing Trends In a Surprising Way

Apple released four new iPhone 16 models in September 2024. While the announcement, hype, and release happened just as consumers and players in the mobile industry have come to expect, what happened next in the secondary market was something of a surprise. 

iPhone 16: Secondary Market Performance

Barely a month after its release, buyer’s remorse kicked in for the iPhone 16 and returned devices began flowing through B-Stock’s B2B online auction resale channel. While the timing for this early wave of returns has been roughly in line with prior years, the pricing is certainly not. Usually, B2B bulk transactions don’t approach retail prices, but in the case of the iPhone 16 series devices, the secondary market prices are surpassing retail. In the first round of auctions, which were for bulk quantities of the iPhone 16 Pro, pricing per unit fetched above retail.

While this phenomenon isn’t unprecedented—we observed something similar happen with the iPhone 12 shortly after launch—it’s certainly unusual and worth exploring. 

One month post-release, a functional and cosmetically sound, latest-generation iPhone typically fetches 82-89% of the original retail price; this time the iPhone 16 variants sold for 101.5% of retail price. Specifically, the average price per unit was $1,016  (compared with $999 retail). How could this happen? 

Why would B2B secondary market prices be higher than retail?

There are a few different possibilities:

Higher Prices in Higher-MSRP Regions

New iPhone 16s could be otherwise unavailable in certain configurations and certain locations. For example: a majority of these devices will end up outside of the US. The phones are sold into geographies with higher MSRPs from Apple like Asia, South America, and the Middle East, as well as areas in which supply from the OEM cannot keep up with demand.

Resellers Take Upfront Losses to Secure Rewards & Upsells

A portion of these devices will also stay domestic: in addition to physical electronic/cell phone resale stores, these devices will get sold on e-commerce platforms like eBay. In many cases the marketplace may run promotions or offer incentives to sellers with this inventory so that their site can become a destination for buyers looking for the latest tech, so the seller is willing to pay a higher price. Along those lines, small mom and pop retailers or carriers are often willing to take a loss on hardware in exchange for selling a plan or ancillary service like insurance.

Regional Tax Differences

Sales tax arbitrage also comes into play given the high price of these new models—there may be money to be made for sellers willing to buy and sell across markets with significant pricing and tax differences.

What else are we seeing in the iPhone secondary market?

With mobile trade-in rates substantially down and longer upgrade cycles, demand and pricing for used iPhones on the secondary market are up. Here is a quick snapshot of some of the other trends we’re seeing:

• Around 50 million iPhone 12 devices are entering the upgrade window, and Apple is showcasing iPhone 16s’ improvements by benchmarking its CPU, GPU, and camera performance against the iPhone 12 series. The OEM also called out iPhone 12 series users could trade in to secure $800-1,000 in credit toward an iPhone 16 variant
  
• Used pricing for iPhone 12 is holding strong: the generations to come out since the 12 release has given consumers few compelling reasons to upgrade, given that they were all very similar to the iPhone 12 in terms of function and form factor.
• iPhone 13 and iPhone 13 Pro Max are currently the top two used iPhone models sold across B-Stock’s B2B platform.
  
• In the aggregate, used pricing for top iPhone models peaked at the end of Q2 and then remained consistent in Q3. Overall, pricing has remained high due to a lack of supply from consumers holding onto their devices for longer.
  
• Wholesale pricing for the iPhone 15 Pro Max is going for up to 74% of original retail, with little to no depreciation.
  
• Even with the new Apple Intelligence feature, the market has tempered its expectations for iPhone 16 sales. At this time, no massive upgrade cycle is anticipated as iPhone models 12 through 16 remain mostly unchanged.

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