SIM Free VS Contract: Resale Value of Your Handset

kenlo · ‎24-09-2013

One reason why life’s better out of contract is that you can upgrade or change your phone at any time. If you had a SIM-free phone, you’d be able to sell it after 12 months and upgrade to a new one. You’d get much more in terms of resale value than selling a contract phone after 24 months.

The Resale Value of Your Handset

One of the most exciting things about smartphones is that they advance incredibly quickly. Two years ago, the top handsets came with a 960x640 display, a dual-core processor and an 8 megapixel camera. Nowadays, high-end smartphones have a full HD display (1920x1080 pixels), a quad-core processor and a 13 megapixel camera. With the rapid advances in technology, it always pays to have the chance to upgrade early.

If you’re tied in to a 24 month contract, you’ll have the same phone for the next 2 years. Even if your phone gets damaged or becomes slow, it’s difficult to get out of your contract. At the end of a 24 month contract, your handset will normally be two generations old. With two newer models on the market, its resale value will be much lower.

If you choose a SIM Free handset and a SIM Only deal, you’ll be able to upgrade your handset at any time. By selling your old SIM-free handset when upgrading, its value will be much higher. For the iPhone 4S and the Galaxy S II, your old phone could have fetched between £275 and £300 after 12 months. In comparison, it would be worth a lot less after a 24 month contract: approximately £150 to £200.

In this article, we take an in-depth look at the resale value of your old handset.

Resale Value of Apple iPhone 4S

Apple released the iPhone 4S in October 2011. It introduced the world to Siri for the first time as well as the iCloud cloud storage service. It was superseded after just 11 months: the iPhone 5 launched in September 2012 with a bigger display and a faster processor.

If you had bought a SIM-free iPhone 4S, you could have sold it in September 2012 when upgrading to the iPhone 5. This would have fetched you around £300.

In contrast, someone who signed up for an iPhone 4S on 24 month contract would still have at least 6 months left on their contract. Today, a second-hand iPhone 4S would sell for around £200. With the next iPhone just around the corner, prices are likely to fall even more over the next 6 months. As contracts come to an end, the resale value of an old iPhone 4S is likely to be nearer £150. This is half the amount it would have been worth last September.

The following graph shows how the resale value of a second-hand iPhone 4S has changed. We’ve used data from the Amazon Marketplace – an online store that’s similar to eBay. See the end of this article for more information on how prices were collected.
iPhone 4S.png

The resale value of a used “Apple iPhone 4S 16GB SIM-Free” on the Amazon Marketplace.

Resale Value of Samsung Galaxy S II

Samsung Galaxy S II Two years ago, Samsung’s Galaxy S II ruled the roost when it came to Android. Originally released in April 2011, the Galaxy S II came with a dual-core processor, a 4.3-inch display (800x480 pixels) and Android 2.3 Gingerbread. Since then, Samsung has released several successors including the Galaxy Note (November 2011), the Galaxy S III (May 2012) and the Galaxy Note II (October 2012).

At the end of this month, Samsung will release the Galaxy S4. The Galaxy S4 will feature a quad-core processor, a 5-inch display (1920x1080 pixels) and Android 4.2 Jelly Bean. It will also feature a 13 megapixel camera: a big upgrade compared to the Galaxy S II’s 8 megapixel camera.

If you had bought a SIM-free Galaxy S II at launch, you could have sold it for £274 in April 2012, just before the Galaxy S III launched. Your £274 would have gone a fair way towards buying a new phone (e.g. the Galaxy S III).

If you bought a Galaxy S II on a 24-month contract at launch, it would come off contract this month. As of today, a second-hand Galaxy S II that was sold on Amazon would fetch around £157. This represents a drop of £117 when compared to the phone’s value last year. As with the iPhone, the resale value of an old Android device will be much lower at the end of a 24 month contract.

The resale value of a used “Samsung I9100 Galaxy S II 16 GB Sim Free Smartphone” on the Amazon Marketplace.

Resale Value of BlackBerry Bold Touch 9900

BlackBerry Bold Touch 9900 In 2011, the flagship device from BlackBerry was the Bold Touch 9900. Featuring the BlackBerry 7 operating system, it was BlackBerry’s attempt to take on the iPhone and Android: it featured a QWERTY keyboard as well as a touchscreen interface.

The BlackBerry Bold Touch 9900 was released in May 2011. Customers who bought it on a 24-month contract will finally be able to upgrade from next month. Options include the new BlackBerry Q10 which runs BlackBerry OS 10.

Someone who purchased this device SIM-free could have sold it for £350 after 6 months. Alternatively, the device would have fetched around £222 after 12 months. This compares to the price of £130 today. Once again, the resale value is much lower at the end of a contract.
BlackBerry Bold 9900.png

The resale value of a used “Blackberry Bold 9900 Sim Free Mobile Phone-Black” on the Amazon Marketplace.

Resale Value of Nokia Lumia 800

Nokia Lumia 800.jpg Another big device in 2011 was the Nokia Lumia 800. This was the world’s first Windows Phone from Nokia. Running the Windows Phone 7 operating system, the Lumia 800 was released in November 2011. It became Nokia’s flagship device for the year but was later succeeded by the Lumia 900 (April 2012) and the Lumia 920 (November 2012).

If you had bought a SIM-free Lumia 800, you could have sold it for £129 in November 2012 (12 months after it launched). Today, a second-hand Lumia 800 will sell for around £110 on Amazon.

The resale value of a used “Nokia Lumia 800 Sim-free Windows Smartphone 16GB - Matte Black” on the Amazon Marketplace.

Conclusions

In this article, we’ve looked at the resale value of smartphones. As soon as they’re released, smartphones will start to drop in value. This is particularly the case when newer handsets come out with faster processors, better specifications and sharper displays. By choosing to buy your next handset SIM-free, you’ll have the flexibility to change it whenever you want. You can also protect the value of your investment by selling it when the price is higher.

Handset	Release Date	Resale Value After…
Handset	Release Date	6 months	12 months	18 months	24 months
Apple iPhone 4S	October 2011	£374	£292	£200	-
Samsung Galaxy S2	April 2011	£314	£275	£200	£157
BlackBerry Bold 9900	May 2011	£350	£222	£185	£130
Nokia Lumia 800	November 2011	£201	£129	£110	-

The resale value of popular handsets from two years ago (2011).

If you’re locked in to a 24-month contract, you’ll be stuck with the same phone for two years. At the end of your contract, your phone would be worth a lot less when you come to sell it on. This is an additional cost that should be taken into account.

About The Data

Selling an old smartphone is a great way to unlock some cash. There are many ways to sell your old smartphone: some people use sites such as eBay & Amazon whilst others prefer to use a recycling service. To get an indication of how much second-hand smartphones are worth, we’ve looked at historical price information from the Amazon Marketplace – specifically for “used” items that are sold by third parties.

Where necessary, we’ve used The Tracktor, CamelCamelCamel and the Internet Archive to obtain old prices. Where the price has changed during a given month, we’ve used the average price for that month.

Whilst we’ve not covered mobile phone recycling prices, a similar trend is seen. Recycling prices drop over time: as with selling on Amazon, you’ll get a lot less when recycling your phone at the end of a 24 month contract.

Your Thoughts…

By buying a SIM-free handset and choosing a SIM-only deal, you’ll have more flexibility on when to change your phone. By upgrading earlier, you’ll potentially get much more for your old handset. Meanwhile, wait until the end of a 24-month contract and your phone would be worth a lot less. It’s another reason why life’s better out of contract.

What do you normally do with an old handset? Do you have any tips on how to get the best price for it? Do you think mobile phones have come a long way in the last 24 months? We’d love to hear your thoughts… please drop a comment below and let us know what you think!

Ken Lo writes about mobile technology and the mobile industry at Ken's Tech Tips.

clare201012 · ‎24-09-2013

It's good but you need the money up front tho that's the problem!! Sent from my already old iphone 5!!

seang · ‎24-09-2013

Good savings over 24 months on GiffGaff if you have the money for the handset up front!

mbthapa25 · ‎24-09-2013

yeah, saving up is the best habit.. and just out of curiosity, are o2 and vodafone plans with 4g access?? i'm guessing they are, as they cost more than that of ee..

aaronjlaw · ‎24-09-2013

giffgaff winning once again with the top end phones.

carlryds · ‎24-09-2013

Really intresting. Thanks for the post.

yuwa · ‎25-09-2013

so much for the free phone with contracts, more like rip-off with above average interest rate..

ma2013 · ‎25-09-2013

Thanks for the blog. I bought my phone sim free and overall is worked out way cheaper than contract. I did have to save up for like a year before i could afford a good phone though, but worth the wait I think. ;-)

jeff_elephant · ‎25-09-2013

I'd definitely recommend anyone looking to buy a handset outright or sign up to a 24 month contract, to build a simple Excel model, like @kenlo has done above, so you know what the 'total cost' is.

My other suggestion is not to buy a phone within the first 3-6 months of its 'life'. Once a flagship smartphone like the iPhone 5S or 5C, or HTC One, Sony Xperia Z1, etc, are 6 months old, bloggers, tech people, mobile carriers are already talking about the next version of that flagship phone. And competitors have introduced their new smartphones during the last 6 months, upping the smartphone game. Bottom line is that prices come down substantially for handsets and 24 month total contract payments, after a smartphone is 6 months old.

zubair1997 · ‎25-09-2013

thanks for that very interesting

keroberos · ‎25-09-2013

I have a 4S 32gb, and its a shame to see that apple are just pumping out new phones every year. Seems they're doing a 'Call Of Duty' thing now. It's a pity. :catsad: