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8/29/2012
09:47 AM
Eric Zeman
Eric Zeman
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Are Consumers Dumping Samsung Smartphones?

Trade-in sites, research firms suggest consumers are unloading their Samsung phones in the wake of the courtroom loss to Apple. But some are just upgrading.

Apple iPhone 5 Vs. Samsung Galaxy S III: What We Know
Apple iPhone 5 Vs. Samsung Galaxy S III: What We Know
(click image for larger view and for slideshow)
Gazelle.com buys, sells, and trades electronic devices, including smartphones, tablets, laptops, and desktops. In the days since Apple won a patent infringement lawsuit against Samsung and sought to ban a swath of Samsung smartphones, Gazelle.com has witnessed a change on its site. It says the number of Samsung devices being traded in has jumped by 50% over the past three days, leading to a 10% drop in the value of those devices traded in.

"Consumers seem to be jumping ship," Anthony Scarsella, chief gadget officer at Gazelle.com, told MarketWatch. "We expect this trend to continue, especially with this latest verdict."

Gazelle.com reports that the glut of Samsung devices reaching its site has devalued them, which means consumers won't get as much cash back when they are traded in. So, has the verdict really devalued Samsung's devices, or is it simple supply and demand in effect here? Seems like the latter to me.

[ The Apple-Samsung trial had a number of winners and losers. Read Apple Verdict Could Boost Microsoft, RIM Smartphones. ]

MarketWatch goes on to point out that the resale value of Apple devices has historically been higher than that of competing devices.

"Even before the ruling Android products didn't hold their resale value as well as iPhones," said MarketWatch. "The Samsung S II--which sells for $199 new on a two-year contract, the same as a 16-GB iPhone 4S--currently goes for $90 on resale site NextWorth.com. The iPhone, however, sells for as much as $300 on NextWorth."

Global Equities, a research firm, decided to do some polling. It called up five AT&T stores, three Costco Stores, five Sprint Stores, and three Verizon Stores to see what was going on, reports CNN.

"Following Apple and Samsung August 24th verdict, customers rushed to buy Samsung Galaxy S III this weekend, with some stores reporting stock outs," said Global Equities' Trip Chowdhry.

The two reports suggest that consumers are dumping the Samsung Galaxy S II, which is one of the many devices the jury found to infringe on Apple's patents. Global Equities says they're doing this in favor of the Galaxy S III, the successor to the GSII. In other words, consumers might be dumping one Samsung device for another. I'm sure Samsung is crying in its milk.

It's worth pointing out that the Galaxy S II, while still a great phone, is 18 months old. It debuted in February 2011 and went on sale in the U.S. June 2011. The Galaxy S III is a dramatically superior device and worth the upgrade with or without the context of the Apple/Samsung drama in the background.

Further, tons of new devices have reached the market in the last few weeks and many more are set to debut. Next week alone as many as three new flagship devices are expected from Motorola, Nokia, and Samsung.

Last, resale sites have really ramped up the visibility of their trade-in programs. Some are even airing television commercials to make consumers aware of the value of their old devices.

The real effects of the trial's outcome are likely months away from being felt.

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wht
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wht,
User Rank: Strategist
9/4/2012 | 4:21:18 PM
re: Are Consumers Dumping Samsung Smartphones?
Maybe you should move where there is a good signal, or change carriers. I don't think it's the phone.
geovern
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geovern,
User Rank: Apprentice
9/3/2012 | 8:20:02 PM
re: Are Consumers Dumping Samsung Smartphones?
My Galaxy S II has turned out to be a lemon as far as use as a phone. I am sitting here in my home/office in a supposed to be strong signal area with one weak or no signal strength bar.
All the rest of the stuff it does is "gilding the lily" but his is no lily.
I've gone back to my Razor which is an excellent "phone."
George
JMARINER957
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JMARINER957,
User Rank: Apprentice
9/2/2012 | 2:10:53 AM
re: Are Consumers Dumping Samsung Smartphones?
When the verdict was announced Apple said they were going to seek an injunction barring sales of additional Samsung models including the SIII and Note. That's why the SIII is in short supply. People are selling their SII to get an order in for the SIII before they disappear from the market!
moarsauce123
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moarsauce123,
User Rank: Ninja
8/30/2012 | 11:02:13 PM
re: Are Consumers Dumping Samsung Smartphones?
What kind of a contorted conclusion is this? What's next? Microsoft shares fall 1 cent, because a bag of rice tipped over in China?
Andrew Hornback
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Andrew Hornback,
User Rank: Apprentice
8/30/2012 | 12:05:28 AM
re: Are Consumers Dumping Samsung Smartphones?
Oh, this is good for a laugh... people are taking perfectly good devices and getting rid of them because of a ruling that may lead to the manufacturer paying a fine and having to re-engineer their devices. Really?

That's like having a cherry 73 Ford Pinto in mint condition and getting rid of it because there was some sort of legal action against Ford and they lost.

Or, a better comparison, changing your favorite baseball team because the old team had a down year and this other team had a good year.

Use what works, plain and simple - did your device suddenly die because of the ruling? No, didn't think so. And yes, that's said by someone who still uses SGI workstations built in the early and mid 90s in a production environment from time to time.

Andrew Hornback
InformationWeek Contributor
pkohler01
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pkohler01,
User Rank: Apprentice
8/29/2012 | 8:10:19 PM
re: Are Consumers Dumping Samsung Smartphones?
I don't know how much either device retails for with or without a plan but, has anyone looked at the value loss of these two devices (iPhone 4S and Samsung Galaxy SII) based on the percentage of MSRP lost when sold used?

Interesting article! Thanks for sharing it with us!
rondhamalam
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rondhamalam,
User Rank: Apprentice
8/29/2012 | 4:45:03 PM
re: Are Consumers Dumping Samsung Smartphones?
Lol..... stupid question
Nicky Blue
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Nicky Blue,
User Rank: Apprentice
8/29/2012 | 4:03:33 PM
re: Are Consumers Dumping Samsung Smartphones?
Haha. Love stuff like this. It's so fabricated and not true. All local stores are sold out of Samsung Galaxy S3's - And BTW...we love ours and wouldn't get rid of it regardless of the judgement.
Eric Z
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Eric Z,
User Rank: Apprentice
8/29/2012 | 4:01:16 PM
re: Are Consumers Dumping Samsung Smartphones?
Unfortunately, Samsung hasn't shared any data about sales of the Galaxy S III. Neither have any of Samsung's carrier partners in the U.S. (AT&T, T-Mobile, Sprint, Verizon). It's definitely one of the best phones available at the moment. There's very little I'd change about it. That said, I am sure the GS3 is a strong sellar and will remain so for some time. I'd love to report that GS3 sales are "skyrocketing" but there's no hard data to back that up right now.

Eric.Zeman@gmail.com | +1(973) 970-5664 | @phonescooper | GTalk: eric.zeman | Google Voice: (646) 389-3626
marrero412002
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marrero412002,
User Rank: Apprentice
8/29/2012 | 3:46:40 PM
re: Are Consumers Dumping Samsung Smartphones?
Hey Eric Thats true what tom is saying. and you are writing stating that everyone is dumping Samsung they are selling like hotcakes right now. Cant wait for the galaxy note 2 coming out.
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