Why do smartphones and tablets lose value the longer they stay idle?

Smartphones and tablets are items that depreciate rapidly, and the longer they are left unused, the more value they lose. If you purchase a smartphone or tablet when it's newly released, after a year of use, the likelihood is that its value has decreased by 30% to 40%, and after two years, it continues to drop, sometimes even below 50%, depending on the model.

Now, let's analyze the factors contributing to the quick depreciation of technological products, especially smartphones and tablets.

Tech items lose value even before you unwrap them

In reality, this holds true for almost every product. When you buy any item and haven't even unboxed or used it, selling it would already mean losing 5-10% of its value, unless the seller supports buyback by deducting from the purchase price for you to switch to another product.

For smartphones and tablets, once unboxed and warranty activated, the value continues to decrease by an additional 5-10%. Therefore, right after purchase, unboxing, and warranty activation, the device's value has dropped approximately 10-15%. There are instances of users making hasty decisions and finding themselves in a dilemma, reluctantly accepting significant losses, sometimes in the tens of millions, when they've just bought a new device.

Short product release cycles

One significant reason why smartphones and tablets rapidly depreciate is the relatively short product release cycle. For example, premium phone models like iPhone, Galaxy S, etc., introduce new versions every year.

The prices of these products often remain stable, meaning the price in the following year is not higher than the previous one. Clearly, last year's products (if still in business) have to lower their prices. When the new product's price drops, the old product loses even more value.

As the successor model's release date approaches, the prices of the previous versions drop even further. For instance, at the current moment, the new iPhone 14 series has already seen a reduction of about 15-20%, even though the new iPhone 15 series is four months away from its launch. This means that the resale value of the device has decreased by at least 30-40% compared to its initial launch. For example, the iPhone 14 Pro, initially priced around 30 million VND, is now reselling for less than 20 million VND, despite its good condition and high battery life, as brand-new devices are available for less than 25 million VND.

The deep price reduction of the iPhone 14 series undoubtedly influences the prices of older iPhone models and even prompts other phone brands to simultaneously decrease their prices in the competitive effort for market share.

Decreasing warranty durations

When purchasing a device, warranty is a crucial factor. If stores or dealers provide their own warranty for used devices, once sold, the responsibility ends. Devices still within the official warranty period are likely to have higher value.

For example, if you buy an iPhone 14 right at the launch (around October), there is still about 5 months of official warranty remaining, providing buyers with more confidence and, of course, a higher resale value. Over time, the warranty period shortens, and by the second or third year, the device is practically out of warranty. Buyers must accept potential risks, leading to a deeper price reduction.

Battery capacity decreases, appearance deteriorates over time

No matter how careful you are, no matter how well you maintain your device, areas like speaker holes, mic, and charging ports will accumulate dust and degrade in appearance over time. Especially, regardless of any precautions, the battery will naturally wear out. iPhone users can even check the maximum battery capacity compared to a new device. As the capacity decreases, the device depreciates.

Low performance, outdated design

In the ever-advancing tech market, racing towards performance, coupled with the increasing graphic intensity and demanding processing capabilities of modern games, phones that are 2-3 years old, especially in the mid-range segment, will start to struggle to efficiently run the latest software and games.

Design is a crucial aspect to consider as users always seek to own fresh devices every year, prompting manufacturers to consistently alter them, be it subtly or significantly. The consequence is that phones with excessively long lifespans gradually become outdated. This diminishes their appeal and, obviously, results in a significant decrease in value.

The second-hand market is becoming increasingly vibrant with an abundant supply

As a product persists on the market, more old devices accumulate, leading to an extremely abundant supply. The increasing competition among sellers further intensifies, making device prices more competitive over time. This is one of the reasons why the prices of used devices rapidly decline.

Conclusion

In general, smartphones, tablets, and many other tech products quickly depreciate, and the longer they stay unused, the deeper the price drop for various reasons. Consequently, the prices retailers offer in trade-in programs are usually not high, especially for products that are 2-3 years or older. For these products, stores must conduct device checks, replace batteries, and provide their own warranties when selling.

However, in trade-in programs, retailers like Mytour often introduce additional incentives to facilitate customers who want to upgrade their old devices without the hassle of selling them separately. For example, in the 'Unlimited Trade-In' program, customers can receive an additional 30%, up to 3 million VND, and an extra 5%, up to 500,000 VND for SMembers. This significantly boosts the value of old devices, providing a great opportunity for customers to upgrade to newer models.

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