Used iPhones, Cheap?

Everyone might be focused on the launch next week of the iPhone 3G, a speedier version of Apple's original iPhone that's been restyled and has a GPS radio to boot. But what about those left behind? The "2G" iPhones that use the slower EDGE network run by AT&T in the U.S. and other carriers worldwide? There could be hundreds of thousands of these phones--possibly even over a million--hitting the market as customers upgrade to the spanking new model.

In the U.S., owners of 2G iPhones with a two-year contract can be released from that contract and get a subsidized iPhone 3G, as long as their accounts are in good standing. Because 2G iPhone buyers paid the full cost of the phone, they get to keep the older model, which is deactivated as the iPhone 3G is enabled.

These older iPhones can be sold or given away--family members may be knocking on your door and calling you if you have such an item--and AT&T confirmed for me yesterday that a 2G iPhone qualifies for the cheaper 2G calling/messaging plans. They start at $20 per month for both data and SMS, where an equivalent iPhone 3G plan is $30 for data and $5 for SMS.

The older iPhones may also be appealing because they can still be jailbroken and unlocked. The former term, jailbreaking, refers to the ability to install third-party software without Apple's say-so. The iPhone 2.0 software that's available free to current iPhone users (in a few days) and will be part of the iPhone 3G release includes the App Store, a way to download free and for-fee software--but only packages Apple has approved.

Unlocking an iPhone has wider appeal. Except in certain countries that have a requirement for carriers to offer an option to buy an unlocked phone--often at an exorbitant price--iPhones can't be used on networks other than the carrier which sold the phone. This lock protects the exclusivity of Apple's deals with various telecom partners, and has no consumer benefit.

For instance, many international travelers have multiple SIMs (Subscriber Identity Modules), which authenticates a phone onto a carrier's network, that let them make affordable calls in the country they're in, rather than using the insane international pricing charged by their home carrier.

The 2G iPhone can be unlocked through techniques developed and given away or sold by various developers and firms.

My question is: will used 2G iPhones have a premium in the U.S. above $200 when in good condition when sold on eBay and other auction sites, or does AT&T's $200 subsidized price (8 GB model) lower the value of the older phone, even though the service plan is higher and the iPhone 3G will likely be even more secured against unlocking and jailbreaking?

For comprehensive coverage of the Android ecosystem, visit Greenbot.com.

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