What Will Happen Now That Apple Has Discontinued iPhone 5s and 6?

Posted by Jonathan Edmondson on Oct 7, 2016 10:00:00 AM


It’s fall and that means Apple has yet again unveiled a new iPhone. In what’s become a familiar ritual, consumers are excitedly pulling their new iPhone 7 models out of the box and again solidifying the smartphone’s hold on the tech marketplace.

As with every other introduction of a iPhone, the rollout of the iPhone 7 means the older models – which themselves were once the hot, new products – find a new position in the Apple hierarchy. All models that precede a new one drop a notch on the iPhone family tree.

How Does This Impact the Trade-in Value of iPhones?

But this annual shifting of status doesn’t mean old iPhones drastically drop in resale price. No, the iPhone is such a popular and well-made product that used versions retain significant resale value long after they’re no longer the new kid on the block, and this is true even after Apple discontinues sales of older models in their stores and online.

We’re seeing this play out this fall with the discontinuation of the iPhone 5s and 6. Apple now sells only the 7, 6s and SE (not to mention the Plus versions of the 7 and 6s) in an attempt to focus consumers’ eyeballs and wallets only on the latest products. Apple has done this before: the iPhone 5 was discontinued just 10 days after the 2013 release of the 5s. (Oddly, the iPhone 4s was discontinued in 2014, a full year after the discontinuation of the 5.)

Get the Q2 2017 Mobile Trade-in Data

As seen after previous iPhone releases, demand for the 7 won’t greatly affect the price of the other models. There will be a natural decrease in value of the older models, of course, just like when a car – no matter how well-built, economic on gas and fast on the road – automatically sees its sale price drop when a new model is released.

Just because the iPhone 5s and 6 are now discontinued, their prices won’t take a big hit. The prices will drop relative to the 7 and 6s, but nothing drastic enough to dissuade people from selling the older models and the secondary market from buying them. A simple way of understanding this is even if Apple had continued selling the iPhone 5s and 6 in store and online, their prices would be the same as they are now, discontinued.

Secondary Market Support for Discontinued iPhone Models

Quality parts for the iPhone 5s and 6 are widely available because there are millions of the devices around the world. People who already own or want to buy used versions of the 5s and 6 can rest easy knowing they these devices will continue to function despite being officially discontinued.

Because the iPhone 7 is, in many ways, a whole new version of the iPhone – and because many owners of the 6, 5s and even the 4 have by now seen their agreements with their wireless carriers expire – it should sell more than the 6s did when it was introduced last September, which bodes well for the secondary market. A boom in sales of new phones usually means many older iPhones will enter the secondary market.

Even with the latest wrinkle to the iPhone 7, the removal of the headphone jack, won’t scare away people who want to a buy a new smartphone. Indeed, the prospect of having to plop down more money for wireless headphones won’t deter many consumers. Core Apple customers are loyal and follow the company down most every road in its quest to embrace new technology. Apple is in a position where it can introduce new advancements and scrap old ones (remember the disc drive?) and just glide over any criticism.

The secondary market also accommodates any technical and stylistic changes Apple makes to new iPhones. So many iPhones are sold – 590 million were sold from 2014 to 2017 – that the secondary market adapts to any changes, no matter how controversial or unpopular they are. Simply put, there’s too big of an economic opportunity for anyone to be hands-off iPhones in the secondary market.

Of course, it’s in Apple’s interest to keep a high value on their older iPhones. The company has embraced residual value because it allows a user to upgrade to the next model faster. With an older model still holding value, the consumer gets a fair price trading it in when upgrading, while Apple simultaneously grows its channels and speeds up its upgrade cycle.

So as consumers rush to buy the iPhone and enjoy a faster smartphone that takes better pictures than previous models, those older iPhones nonetheless have great value on the secondary market and demonstrate the staying power of Apple’s most successful product.

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Topics: Device Processing and Liquidation, Device Trade-in Solutions

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The HYLA Mobile blog is a place for thoughtful dialogue that will ultimately change the perception of “used” phones around the world. Visit the HYLA website to learn more.

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