Posted at 11:24 AM on July 2, 2007
by Jeff Horwich
Personally, I have zip-point-squat interest in the iPhone itself. I don't need a cell phone, nor at the moment do I need another computer/mp3 player/pda in my pocket. Especially not a $500 one. But the hype/buzz marketing/trashing of the iPhone is pretty intriguing.
Investment research guy Georges Yared took a trip to the Mall of America to spy on the Apple Store on Friday. He ran into some folks in line who were hoping to cash in on a scheme that came up on one of Leo Laporte's podcasts I was listening to the other day: Purchase an iPhone and it's associated AT&T two-year plan, cancel the plan, sell the phone on eBay.
Those creative Minnesotans seemed awful confident in talking to Georges, but they might not be so happy today. It turns out the iPhone comes with a hefty $175 fee for early termination of service. With iPhones not all that hard to get, it's tough to imagine recouping that on eBay. The 8 Gig model, which has been most popular, sells for $600. Those 8 GB models are going for about $760 on eBay right now. That means the grab and dump scheme nets you (drumroll....) a $15 loss.
It's the "invisible hand" at work. Ain't economics marvelous?
Finally, a blogger by the name of Large Fella on a Bike tells of winning an iPhone he didn't really want anyway from a radio contest somewhere in our fair state. All he had to do was know what you call a roasted Poblano pepper (doesn't everybody know that?).
Now that's the only reasonable way I can think of at the moment to get an iPhone.
Anybody out there got one of these things? How's it working out for you?
You can activate the iPhone from home from what I've read - which means you can buy it, not activate it, and sell it on eBay - still won't be making any money though - not like some of the other things out there!
Most wireless contracts come with a mandatory federal grace period of 15 days. A contract usually means your getting some sort of discount off of the MSRP of the phone. This means you can cancel the contract within that time period and avoid the early termination fee, and sell the phone at a slight profit but still less than msrp and the new owner doesnt need a contract. Here is the issue though. Some of the cell phone companies have caught wind of this. If you get a 2yr discount for the phone but then don’t send it back after you disconnect during that trial period, they will bill you the advertised cost of the phone + the remaining msrp. This cancels you ability to make any outside profit on the phone.