Looking back at the original iPhone and how that’s worked out, I realize that if there’s anyone that I should be mad at, it’s me. It’s no secret that the value of digital hardware drops precipitously. I guess what’s so surprising — or galling, to many — is just how precipitously the value of an original iPhone, bought in June of last year, has dropped in just twelve months. Take a look at this chart I cooked up.
Fair Market Devalue
Almost exactly a year ago, my then new 8GB iPhone was worth US$599. Now, as soon as you walk any hardware purchase out of the store, it begins to decrease in value, but many of us were shocked when, in September (marked with a blue A) Apple lowered its price by a couple of Benjamins to US$399. Ouch. But as I said at the time, it was an inevitability.
Five months later, in February of this year (B), Apple released a 16GB version of the phone for just US$499. Technically, the price of my 8GB model didn’t change. But at least in my mind, that release caused the value of a used, eight month-old, 8GB model to drop at least a hundred dollars on any resale market.
Today came the kicker (C). A brand new, 16GB iPhone 3G — faster, sleeker, better — was announced at the paltry price of US$299. Ouch. And the 8GB model comes in at the near-giveaway price of US$199. Generously speaking, my iPhone is probably worth no more than US$100 now.
A Bad Investment Opportunity That Knocks Twice
Like I said, this comes with the territory. The “early adopter tax,” is how most people refer to it. I can accept that painful but predictable phenomenon to a certain extent, but here’s where it really hurts. Take a look at the price of Apple stock over the past year, and note that the value of my iPhone is now way less than just one share of AAPL.
It’s certainly not as steep a trend as my iPhone’s devaluation, but it’s significant. In the year since I bought my first iPhone, AAPL has gained roughly 50% in value. If I’d spent that original US$599 on Apple stock instead, I’d be able to buy a new iPhone 3G and have about US$599 in assets to my name. Oh well.
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