Selling an iPhone 3GS to get a new iPhone 4 in the United States

People are often surprised to hear that their old iPhone will make their upgrade free or even pay them.  There are a few tricks to helping improve your chances of making money each time Apple releases a new iPhone.  I thought I’d describe how the process works and my recent experience.

There are a number of tricks to upgrading an iPhone in the United States.  Most revolve around the fact that AT&T subsidizes the cost of new iPhones.  So your old iPhone may be worth as much or more than the cost of a new iPhone if you’re up for a two year renewal.

I’ve been lucky to have every model of iPhone break on me at least one time (except the 4 which hasn’t failed yet) and have every phone replaced by Apple.  My iPhone 3G broke twice.  The first was my now well-indexed bit on the white screen of death.  In the second phone, the sleep switch stopped working (a common problem with early iPhone 3G).  Technically, I’m on my fourth iPhone in just over two years.

The day before the iPhone 3GS launched (June 18th, 2009), I took my malfunctioning 3G to the Apple store downtown Boston.  Since it had been just under a year since I had bought the 3G, Apple replaced the phone and I had a brand new iPhone on my hands.  I ended up selling the 3G for about $380 to someone who wanted to unlock it and send it abroad. Since the new 32 GB iPhone 3GS  was only $300, I got the new phone and pocketed some cash for a screen protector and a Gela Skin.

Today, I did near the same thing with the 3GS.  I only had the 3GS break once on me. One day the device stopped booting properly and would not make it past the Apple logo no matter how many restores and resets I performed.  Since the phone was non-functional, I took it in only a month prior to the release of the iPhone 4, and got a brand new 3GS.

Here are some starter things that will go in your favor:

  • If possible, always buy your iPhone from the biggest Apple store in town.  My experience is that Apple stores are best at taking back purchases from their own location.  I’ve heard of AT&T taking returns rejected by the Apple store but that’s not been my experience.
  • Be on the upgrade cycle.  Get your contract to line up with the annual June release date for the new iPhone.  This is when the older gen iPhone is at its highest value used.
  • Wait to return a partially working phone until just prior to the launch of a new iPhone.
  • Make sure you have the new iPhone on reserve at the Apple store prior to the sale.
  • List the iPhone on Craigslist, including the OS number and the baseband number.  These are found in the Settings -> General -> About page.  The baseband number is the modem***.  Make sure you use the words ‘unlocked’ and ‘jailbroken’ in the listing even if your iPhone is neither.  For example, “The phone is not unlocked or jailbroken.”  This will improve your  chances of showing up in results.
  • Plan to meet the buyer near your target Apple store.
  • Plan to have backup buyers in case the first fails to show up.
  • Bring a small paperclip to the sale, so you can remove your SIM card.
  • Remember to do a Settings -> Reset -> Reset All Data at the end of your sale. Do not give your phone away until you have wiped all data!

At one point I considered adding AppleCare, since that would extend the time the phone could be owner.  However my experience is that most people buying past generation iPhones are doing so to jailbreak and run on different carriers.  Apple will not return jailbroken phones, so Applecare and the secondary market for iPhones actually collide somewhat.

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