Best Buy offers used iPhones at lower price
ATLANTA (Reuters) - Retailer Best Buy Co, seeking new ways to appeal to cost-conscious shoppers, said on Tuesday it is selling refurbished versions of Apple Inc's iPhone 3G at its stores that are priced about $50 less than new iPhones.
Context & Ripple Effects
Refurbished iPhones have been a price lever since 2007, when Apple itself began selling them at $100 below the original iPhone's price, and online resellers were already moving refurbished iPhone 3G units for $149.99 by late 2008. What is new here is the channel: Best Buy — which had already clashed with Apple over in-store service economics around its Geek Squad accessory-bundle setup — is putting certified used iPhones on physical retail shelves to court recession-era shoppers.
First-order effects
- Cost-conscious shoppers get a roughly $50 discount on an iPhone 3G at Best Buy stores, giving the retailer a lower entry price point without cutting into new-unit pricing directly.
- Best Buy gains a differentiated offer against carriers and Apple's own stores during a downturn, while Apple gets a secondary retail outlet that moves returned inventory it would otherwise have to refurbish and sell itself.
Second-order effects
- Other big-box retailers and wireless dealers face pressure to add their own refurbished or trade-in programs to match Best Buy's shelf price — a playbook that later showed up in Best Buy's any-working-smartphone trade-in credit toward new iPhones.
- A visible street price gap between new and refurbished units pressures Apple's pricing architecture, pushing Apple to formalize its own refurbished channel rather than cede the segment to third parties.
Third-order effects
- If the pattern holds, refurbished devices become a permanent tier of the smartphone market — normalizing 'certified pre-owned' as a standard SKU alongside new hardware and reshaping how carriers, retailers, and manufacturers manage returns and residual value.
The trend: This is an early data point in the mainstreaming of refurbished electronics from a niche gray-market channel into first-class retail distribution, eventually embraced even by Apple itself when it began selling refurbished iPhones directly years later.