In the wee hours of September 12th I woke up to pre-order the new iPhone. I bought the 6 Plus (5.5 inch /64 gb space grey for moi, and a 6 regular 4.7 inch/64 gb silver for my wife). Since I am not much of a line person, the early wake-up was preferred. I was successful in securing the two phones for today’s delivery, but decided to buy a third, another 6 Plus for pure speculation. Why you may ask? Well, media reports were fairly clear that the new larger Plus was going to be on short initial supply with potentially high demand as Apple enters into an entirely new smartphone (phablet) category. Also, it became apparent of late that the new phones would be delayed in China, a very important growth region for Apple, but also a region where larger phones by competitors have been very popular.
My Fill: I paid $400 for my iPhone 6 Plus (with upgrade pricing), I paid $600 for the iPhone 6 (with no subsidy) and paid $700 for the second iPhone 6 Plus (no subsidy). So I am in for $1700 on three phones. Two of the phones I intended to keep, and one for spec.
I have been checking in on the only real transparent marketplace for such items, EBAY, and had a good sense that the iPhone 6 Plus has been in demand:
— Dan Nathan (@RiskReversal) September 17, 2014
So here was my trade. This morning, I noticed that the line at one of Apple’s largest stores, in my neighborhood in the Meatpacking district in Manhattan, had the biggest line I have ever seen for an iPhone launch (I have walked by on all of the first morning launches). The iPhone 6 Plus will sell out quickly, as it did on the line for the pre-orders. With China still out of the picture, and lead times online suggesting 3 to 4 weeks, there is an Arbitrage opportunity.
I listed the second iPhone plus on EBAY with a Buy It Now option at $1500 (a level in and around where they have been trading the last couple days). My $1500 offer got lifted within an hour of posting:
So the point of this post, obviously, was to brag about my quick $800 profit 🙂 But most importantly it is to highlight the active gray market in new iPhones. Oh and I just listed my iPhone 5S on EBAY, and given current trades, the 32 gbs have been trading between $300 and $500. So basically the demand for used, old iPhones is robust in parts of the world where the phones are harder to get or more expensive due to issues with lack of carrier subsidies. There is a tremendously active secondary market.
Hopefully this won’t be my most profitable trade of the day, but I thought it was an interesting example of supply and demand in a market that is one of the key drivers in the markets that we traffic in every day to make our living.