By Antony Bruno
The popular iPod Nano and the just-released video iPod are expected to
lead a surge of holiday sales for Apple Computer. Research firm
Fulcrum Global Partners predicts Apple will sell 10 million iPods in
the fourth quarter, a strong follow-up to the 7 million sold in the
previous quarter. But not all of these sales will be to new iPod
owners.
Piper Jaffray analysts say about 30 percent of the iPod purchasers are
now repeat buyers who are either replacing an existing,
earlier-generation iPod or adding to their range of styles (such as an
iPod Shuffle and a video iPod).
If the average lifespan of an iPod is about 1.5 years, what happens to
the older models?
Analysts say most users hand down their iPods to friends or family
once they purchase a new one. Some simply throw them away.
Increasingly, however, consumers are capitalizing on the growing iPod
phenomenon by selling their used iPods for cash or as a trade-in toward a
new device.
And it is not just for bargain hunters, either. With the popular iPod
Mini being discontinued, many fans have turned to the refurbished
market to track down a favorite color in what is becoming a
cult-nostalgia item.
"There is an emerging market for older iPods," Piper Jaffray analyst
Gene Munster says. "Apple discontinues successful products that people
feel some sort of connection to. They're the retro-cool thing."
COTTAGE INDUSTRY
Internet auction site eBay has literally thousands of iPod and
iPod-related products for sale. The site is considered a leading
resource for those seeking an inexpensive way to join the iPod
revolution. So is Web site Craigslist.
With 28 million iPods sold worldwide, the potential for iPod
refurbishment and sales has created a cottage industry of sorts.
Small Dog Electronics, for instance, is an established Apple reseller
that has for years sold refurbished Macintosh computers and other
accessories. The company now sells around 500 used and refurbished
iPods per month from its Web-based store at significant discounts. A
refurbished third-generation, 30GB iPod that cost $400 in 2003 now
runs for about $210, for example.
The company offers up to $100 off the price of a new iPod to anyone
trading in a used one. According to CEO Don Mayer, the pace of such
replacements is expected to increase as iPod sales continue to grow.
"You have a curve that's getting larger every quarter for the
installed base of iPods," he says, "so the used and refurbished ones
are getting more and more prevalent. All that increases with volume."
Another company, PodSwap, takes it a step further by not only offering
cash for used iPods but also shipping players loaded with music that
has been authorized for such distribution by artists who own the
necessary rights.
Both companies collect the used devices, determine and classify their
condition, make whatever repairs are necessary and then clear the
memory of any music files before shipping.
COLLECTIONS FOR SALE
It is a bit more loose on Craigslist and eBay. Several iPods up for
auction include the sellers' music collection and instructions on how
to transfer the music from the iPod to the buyer's computer. Some even
take requests for additional songs to be added prior to shipping.
One video iPod for sale contains an entire season of TV show "King of
Queens" included.
Even Apple competitors have tried to use the swap as a promotional
tool. Dell offered a $100 mail-in rebate to any customer turning in
an old iPod when buying one of its MP3 players.
Interestingly, all the deals are better than what Apple itself
offers. The company began offering iPod owners a 10 percent discount
on new iPods when they trade in an older device. That translates to
anywhere from $45 off a 60GB video iPod to $10 off the iPod Shuffle.
Reuters/Billboard
Copyright 2005 Reuters Limited.
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Antony Bruno (reuters@telecom-digest.org)