Apple Rolls Out Refurbished iPhones For $100 Less
Apple's refurbished iPhones retail for $499 and $399 — Apple's iPhone has only been on the market for about two months, but the company is already selling refurbished phones to customers with a one-year warranty.
Context & Ripple Effects
Apple is barely two months into the iPhone's life cycle, yet it has already opened a certified-refurbished storefront — $100 off list price at $499 and $399, each unit carrying a full one-year warranty rather than a discounted one. Engadget flagged the move a day earlier, and the speed matters more than the discount: refurbs this early mean Apple already has a return-and-exchange pipeline worth monetizing.
The launch sits inside an unusually busy August for the device — the 1.0.2 bug-fix update shipped via iTunes just weeks after the first update, an updated Installer.app is letting non-technical users add third-party native apps, and confirmed reporting has Apple extracting revenue shares from European operators bidding for exclusivity. Against that backdrop, a cheaper warranted entry point widens the funnel while Apple keeps every dollar of the hardware-plus-service economics in-house.
First-order effects
- Buyers who balked at the $599/$499 list prices now get a warrantied $499/$399 path into the iPhone directly from Apple, with no carrier subsidy involved.
- Apple converts its early return inventory from a support cost into revenue, while keeping the resale experience — and its margin — off eBay and away from third parties.
Second-order effects
- Rivals being crowded out by the iPhone's attention, Palm among them, now face a competitor whose effective entry price dropped $100 within two months of launch — without an official price cut that would anger early adopters.
- A formal Apple-warranted refurb tier sets a quality benchmark for the gray- and second-hand market, pressuring independent resellers to match warranty terms they cannot easily underwrite.
Third-order effects
- If the pattern holds, certified refurbished becomes a standing rung on Apple's pricing ladder — a way to manage supply, capture exchange units, and hit lower price points between official generations.
- Carrier revenue-sharing plus a first-party refurb channel point toward Apple controlling both the subsidized front door and the resale back door of the smartphone market, a structure competitors must eventually answer.
The trend: Smartphone makers are institutionalizing certified-refurbished programs as a controlled second pricing tier, with Apple moving fastest by backing refurbs with the same one-year warranty as new units only two months after launch.