Samsung smartphone users flood resale market with devices

Samsung smartphone owners are dumping their devices in droves after Apple won a court battle against the South Korean manufacturer over patents last week. Resale site Gazelle says it has seen a 50 percent spike in sales of Samsung phones from its customers, right around the time of the court verdict in Apple’s favour.

Last week a jury in California found that several Samsung phones infringed on patents held by Apple. Jurors also said the devices copied the look and feel of Apple’s iOS devices. Samsung has to pay more than $1 billion in damages and Apple is also seeking a sales injunction on eight Samsung phones, including the Galaxy S 4G and several variations of the Galaxy S II.

Samsung’s court defeat did not bode well with its customers, if the spike in resales on Gazelle is any indication. Since Friday’s court verdict, Gazelle said it had a 50 percent increase in sold-in Samsung phones, a flurry that also led to a 10 percent drop in prices for these devices.

The resale value of Samsung’s smartphones could drop even further if more users dump their phones and flood the market. The resale value of Android phones has always been much lower than that of the iPhone, mainly because of a variety of cheap models on the market and the particularly patchy record of software upgrades for older Android devices (also known as fragmentation).

Apple’s court win could not have come at a worse time for Samsung, especially as a new iPhone is expected in mid-September. A quick check on several resale sites, including Gazelle and NextWorth, shows a Samsung Galaxy S II, which retailed for US$200 with a two-year-contract, just like the iPhone, would fetch you between $80 and $116, depending on the device’s condition. In comparison, you could get up to $200 for an iPhone 4, or up to $300 for an iPhone 4S, indicating Apple’s devices indeed keep more value in aftersales.

Apple, however, is seeing its own share of aftersales flurry, ahead of the introduction of the next-generation iPhone. Since several respectable publications reported September 12 as the day that Apple will announce a new and improved iPhone, eBay said users submitted more than 100,000 smartphones on the Instant Sale program -- mainly iPhones -- a 70 percent increase on before the rumour hit.