Implications
Best Buy is now re-selling used iPhones. Wow. Great idea. This may start a trend. But there is another question I have. Why were these obviously fairly new phones returned?
Analysis
The immediate impression you get is that the 3G iPhone must have enormous after market value. However, I hate running with immediate impressions. My real question is why are so many iPhones being returned? Is it really just an issue of gigabytes? Why couldn’t AT&T deal with the returns? There are more AT&T stores in any given market than there are Best Buy stores. The volume of returned handsets has to be sufficiently large enough to do a deal with Best Buy.
Is there an iPhone 3G Version 2 (16 GB) that performs differently than Version 1 (8 GB)? Maybe because the iPhones being returned are being returned for some other reason. Frankly if I were an investor in Apple, I would be slapping someone silly in Apple for allowing an entire product line to be issued only to have it replaced within a few months with a gigabyte upgrade. Talk about a waste of manufacturing dollars.
When Best Buy and Apple say the phones are being refurbished what does that mean? I love the buzz word "refreshed" certainly sounds "refeshing" to me. Are there any performance issues?
My suggestion to all investors is ask questions. On the surface it sounds compelling but you know what they say if it sounds too good to be true it is not. Am I suspicious? Yes and so should every investor. With all of the nonsense that has gone on with the investment community you have a right to ask questions. Remember it’s your money.
