Terapeak can analyze price and sales data from e-commerce sites such as Ebay. Here is what they've discovered about recent iPhone 5 demand and what it may mean.
The big iPhone 6 announcement came on September 9 (doesn't that seem like a long time ago?) and the usual lines eventually formed as expectant shoppers awaited their first grab at it. With a bigger (and even bigger) screen, amazing display capabilities and nifty camera improvements it's not hard to see the attraction, especially among the Apple faithful.
Of course, a new model doesn't make its predecessors obsolete overnight, nor necessarily cause their prices to drop immediately. Speaking as someone who has an older Samsung Galaxy and a Blackberry Bold (makes a great MP3 player), even as a technologist I'm not compelled to carry the latest-and-greatest; what I've got is more than enough to get the job done. Some old models manage to kick around for years after their time has passed. An old favorite of mine, the Palm TX, can still be had on Amazon for the sweet price of $124.50!
With this in mind, the Apple iPhone 5 won't be going anywhere any time soon, especially in light of some potentially troubling developments involving iOS 8 problems which disabled cellphone service (though Apple is releasing a fix) and the unexpected bendability of the iPhone 6 Plus, which could be cause for concern regarding its durability.
Let's take a look at how iPhone 5 pricing and sales across several models fared on EBay in the wake of the iPhone 6 unveiling. An e-commerce market analysis company called Terapeak analyzed the data for iPhone 5, iPhone 5c and iPhone 5s sales on EBay since September 9th and came up with the following trends both for each model and the average for all. Note that "Non-New Avg." refers to used smartphones.
It's interesting how prices for all models jumped a bit right after the iPhone 6 announcement - especially for the base iPhone 5. This could be the result of a "hoarder" instinct - either real or expected - whereby the perceived value of the current model was deemed overly high in anticipation that those consumers devoted to an iPhone 5 variant might want to reel one in before the opportunities diminished.
The average price for a new iPhone 5 (all models) fell around $55 since it's post-announcement peak, from $491.43 on the 10th to $435.06 on the 18th. In fact, all models ended up with a lower average price last week than they experienced at the time of the iPhone 6 launch (though used models saw less fluctuation).
Prices settled and rose at least three times for each model until last week, showing that pricing here is more like waves rocking a boat than a balloon slowly losing air. The iPhone 5s had the most distinctive ups and downs, perhaps because it is arguably the best model and the one with the most staying power but yet can be hardest to pin a "true" value upon. As you can see, used phones have a much steadier average price than new ones.
Note the large gap between new and used iPhone 5 pricing? This can be useful in determining "real" value versus "perceived" value as well as public opinion regarding the feasibility of buying a used iPhone 5.
What about in the weeks preceding September 9th? Was the iPhone 5 on a steady pricing decline - or perhaps an increase in anticipation of the next model? Let's take a look in the next slide.
Pricing averages still rose and fell here, though more gradually than post-September 9th. New models in particular were deemed more valuable between July 11th and August 8th, possibly as part of back to school smartphone shopping.
Prices are one element of the market; sales are quite another. Just because iPhone 5s prices nearly hit $500 the day after the iPhone 6 announcement doesn't mean they were being mopped up in droves. Terapeak provided a look at EBay sales data for the iPhone 5 both after and before September 9th, grouped by new iPhone 5s phones and ALL used phones:
Since the announcement, new iPhone 5s sales have dropped from about 30% to around 23%. However, over the last 11 weeks, used iPhone 5 sales have steadily increased, from a low of around 69% in late July to a high of around 81% during the most recent week for which data is available (post announcement).
What's the future of the iPhone 5? Only the consumer population overall holds the answer, but thanks to the data we can predict that on a long-term basis values will continue to decline as the line ages, with an ever-increasing proportion of sales to come from used units, which show the steadiest numbers.
Here is some of the raw data involved, which Terapeak was kind enough to provide me for the purpose of the article:
Terapeak's site states they are "the leader in ecommerce market analytics, dedicated to helping online merchants grow their business and become more profitable. Our job is to distill and make sense of big data sets, so we can provide our customers with market insights that can be used to discover new and emerging opportunities. We deliver market intelligence that is both meaningful and actionable... Terapeak helps online merchants to understand the current and competitive landscape of their market space by providing transparency into competitor behavior, pricing techniques and strategies, supply and demand, category and product trends, and customer purchase patterns."
Terapeak's relationship with EBay as an analytics provider gives it access to the complete universe of EBay transactions (excluding real estate and vehicle sales) going back one full year, and to summary category-level data going back two full years. Terapeak makes this information searchable for its customers, who are interested in understanding and charting actual marketplace activity for particular products or categories, for market research and selling strategy purposes. Terapeak also uses this data itself to comment on key consumer products and market trends.
The Apple data was drawn exclusively from EBay's marketplaces (Amazon does not make transaction data available), but recent history has shown that EBay sales are often a good predictor of product demand across all marketplaces, both online and offline.