iPhone versus Galaxy. iOS versus Android. Smartphone preference can be a bit like religion for some people — you believe what you want to believe, you like what you like, and no one can tell you different. However, here's something to keep in mind if you're thinking of buying a new smartphone: iPhones retain significantly more trade-in and resale value than those Galaxys, according to statistics compiled by NextWorth Solutions, a company that buys and sells used smartphones.
NextWorth typically sees the highest number of smartphone sales every two "generations," according to Jeff Trachsel, the company's CMO. Looking at thousands of transactions, Trachsel determined that Apple's iPhone 5, which cost $650 for an unsubsidized, 16GB version 29 months ago, is now worth $127. A Samsung Galaxy S4, which cost $700 when it launched 22 months ago, is worth just $70 on NextWorth today. That's not anomalous. "It varies by model, but there's always been a gap between the two," Trachsel says.
Looked at another way, the iPhone 5 kept 20 percent of its value, compared to 10 percent for the Galaxy S4. That figure actually understates the gap between the two, according to Trachsel, because the Galaxy S4 is a newer phone.
Even when you compare the iPhone 5s, which is a single generation behind Apple's current iPhone 6, to the Galaxy S5, Samsung's latest, the Apple phone still holds more value: 31 percent versus 27 percent, respectively, according to NextWorth.
It's hard to say exactly why the iPhone holds more value than the Galaxy. Although Apple is rapidly closing the gap, Samsung is still the leading smartphone vendor in the world. As for other types of smartphones, such as BlackBerrys and Windows Phones, there's simply no comparison when it comes to retaining value, says Trachsel.
Where is the best place to sell a used smartphone? In addition to NextWorth, there are a number of online trade-in sites, including Gazelle.com and BuyMyTronics. Retailers such as Best Buy will also buy used phones, as will wireless carriers. Or you can head over to eBay.
Payment amounts vary from outlet to outlet, so it's smart to shop around. Obviously a phone in good condition will earn more cash back, but even if your phone is rather battered it may still be worth something.
Trachsel also offers this advice: Before you upgrade to a new phone, consider the trade-in value of your current device. Some carriers that sell you phones on installment plans will let you upgrade when you've paid off 75 percent or so of the total cost. Howver, if you choose this option, you lose the opportunity to recoup some of the original cost by selling it. If you can wait to upgrade and then sell your old phone, you'll likely come out ahead.