On September 10, Apple will announce two new versions of the iPhone, which will go on sale 10 days later. And if history is any guide, among the first buyers will be folks who already own an older model of Apple's ubiquitous smartphone. If you're one of those people, you've certainly got some time to consider your options, but the Labor Day weekend is a good time to begin thinking about trading it in. An older iPhone in good condition will cover some of the cost of a brand new one if you're eligible for a new phone with your carrier, perhaps even more than that. But to realize the value, you'll want to be prepared to make the swap, you'll want to have some idea of how you're going to do it, and perhaps most important, you'll want to know how you're going to end up doing it. This guide, which I'll make available again with updated details once the new iPhone goes on sale, is designed to help you understand the tradeoffs between convenience and getting top dollar for your phone.
For the first time, you'll have the option of trading in your phone at an Apple retail store as well as several mail-order options from companies that make used electronics their business. In addition, Best Buy and some cell-phone carriers are willing to buy back your phone. Finally, you're able to sell it yourself where you'll likely get the best price, but you'll have to expend the most effort.
(In a future post, I'll examine in detail what's in the new iPhones and why those upgrades may or may not entice people to make the swap at all.)
Step 1: Find out your contract status
For many, the upgrade question is intimately tied into whether or not they are eligible for a discounted phone with their current carrier or willing to switch to another for a discount. Typically, if you haven't upgraded in 2 years, you're certainly eligible. But depending on when you got your last upgrade, you might be eligible sooner. The rules have been a moving target and many people are still on plans where they became eligible after 20 months. Some of you might have taken advantage of the new plans from T-Mobile, Verizon and AT&T that you let you upgrade more frequently. The only one of those that is even reasonable to consider is T-Mobile's Jump plan. But all of those programs are new and require some time before you could make the first upgrade, so they shouldn't figure in your calculation yet.
You can check with your carrier now to learn about your upgrade eligibility and you can expect that Apple's own site will allow you to check this easily as well once the new iPhones are announced. At the right is a clipped image from the Verizon site showing an iPhone 4S that is eligible for an upgrade "at a discounted price". Those are the magic words, because it means the 16GB model of the iPhone 5S will almost certainly be $199 with Verizon (or Sprint or AT&T if that was my carrier). The iPhone 5, which was placed on contract last year, would require the dreaded "full price" upgrade, likely at $649. For most people that ends the conversation. You'll see also that Verizon is taking trade-ins, though it calls it recycling. The offers don't seem very favorable, except against one alternative that I'll discuss below.
If you're fed up with your carrier and you have fulfilled your 2-year contract with them, now is a good time to switch. It's worth noting that on average, only about 1% of a given carrier's customers cancel or switch each month if they have traditional "postpaid" plans. People talk about doing it a lot and suggest that new phones will motivate such a switch, but there has not been a lot of data to suggest a spike in switching actually occurs.
Step 2: Make sure everything is backed up
If you have iOS 6 on your phone (and there's a better than 90% chance you do), you have Apple's iCloud functionality baked in, which means you don't need to plug in to back up. You can simply go to Settings –> iCloud –> Storage & Backup. Make sure iCloud Backup is turned On if it isn't already and hit Back Up Now if needed. For those of you already using iCloud, you should see the date and time of the last backup, which ought to be fairly recent. If it isn't, you'll want to hit the button, too, once you're at home or in the office on a WiFi network.
If you haven't ever done this, the first backup is going to take a while, perhaps 15 minutes to an hour or more, but it's worth it. First, you'll have your data securely duplicated on Apple's servers in the event your phone is lost or stolen. Second, you won't need to plug it into a computer and use iTunes to make a copy of your apps and contacts. If you have more than 1000 photos, you're still going to want to plug into a computer and there are some strange aspects with regard to music that you didn't purchase via iTunes originally. Those oddities might require you to subscribe to iTunes Match, but for most people the iCloud backup is a good idea even if you're still regularly syncing with iTunes to keep your music library straight.
Before making any actual trade-in, you'll of course want to make sure your backup is up to date by doing one last press of the Back Up Now button or a sync with iTunes on your computer. Through an odd set of circumstances, I ended up replacing my iPhone 5 twice this year and each time I restored from iCloud without any incident.
(On the next page: How much is it worth? Who should you sell it to?)
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