Fun With Data – Smartphone Residual Value
Smartphones are like cars, they depreciate rapidly as soon as you take them out of the box. Most carriers and smartphone brands offer trade-in options to encourage users to upgrade or replace their phones with the ‘newest’ models with those values based on complex formulae for each brand and model. There are alternatives to carrier or brand trade-in values, with aggregators showing the best prices available for used phones, which can be shipped to the purchasing company for free (They even give you a printable shipping label), with payment via PayPal (EBAY) within 2 days of the receipt of the phone. Most deals have a 14 day lock-in on the quoted price, with the only mitigating factor being the condition of the phone, as most give quotes for mint or good condition levels and quotes for those with cracked screens are considerably lower.
What was most interesting is the data we put together for a number of Samsung (005930.KS) Galaxy phones gives some understanding of how smartphones depreciate. The most recent additions to the Galaxy line, the Z Flip 4 and Z Fold 4 have depreciated 60.0% and 59.4% in the ~1.7 months since their release, given credence to the “…as soon as you open the box…” theory, and while last year’s Z Flip 3 and Fold 3 models have continued to depreciate 12 months after their release, they have only seen a total depreciation increase of 12% and 10% over the initial drop. Taking those models back even further, the Z Fold 2, released in September of 2020 saw only a 6.5% increase in depreciation over the newer model during its second year of life.
The Galaxy S flagship series fared a bit better, with the newest models, the S22 Ultra, S22+, and S22 depreciating only 46.6%, 54.7%, and 57.9% respectively since their release in February of this year. Samsung’s mid-priced line, the “A” series, priced between $600 and $250, did not fare well, with the most recent model, the A53, released in March, depreciating by 87.3% of its initial value in only 7 months, for a rate of 13% price depreciation/ month. Even Samsung’s lowest price tier models, the “A0s” series, which sell for between $250 and $105, saw slower depreciation rates, although most have little or no residual value.
The table below shows a variety of Samsung Galaxy models, their initial price when released, the best current offer for ‘mint or good condition’ phones, the release date, monthly depreciation rate, and the total depreciation, using the first day of the release month for calculations. Figure 1 shows the monthly rate of depreciation from release date to today across those models in the list. While it does not represent the total Samsung line, it gives a better understanding of the monthly rate of value depreciation as the phones age.
Note: I personally have two smartphones, a relatively new (8/21) which cost $499 and a very old (4/14) S5, which cost $649. While the S5 is over 8 years old, it’s the phone I use the most because of its size, which is ~14% smaller than the newer model and doesn’t stretch out pockets. The monthly depreciation rate on the S5 is 1%/month, although it has no residual value
What was most interesting is the data we put together for a number of Samsung (005930.KS) Galaxy phones gives some understanding of how smartphones depreciate. The most recent additions to the Galaxy line, the Z Flip 4 and Z Fold 4 have depreciated 60.0% and 59.4% in the ~1.7 months since their release, given credence to the “…as soon as you open the box…” theory, and while last year’s Z Flip 3 and Fold 3 models have continued to depreciate 12 months after their release, they have only seen a total depreciation increase of 12% and 10% over the initial drop. Taking those models back even further, the Z Fold 2, released in September of 2020 saw only a 6.5% increase in depreciation over the newer model during its second year of life.
The Galaxy S flagship series fared a bit better, with the newest models, the S22 Ultra, S22+, and S22 depreciating only 46.6%, 54.7%, and 57.9% respectively since their release in February of this year. Samsung’s mid-priced line, the “A” series, priced between $600 and $250, did not fare well, with the most recent model, the A53, released in March, depreciating by 87.3% of its initial value in only 7 months, for a rate of 13% price depreciation/ month. Even Samsung’s lowest price tier models, the “A0s” series, which sell for between $250 and $105, saw slower depreciation rates, although most have little or no residual value.
The table below shows a variety of Samsung Galaxy models, their initial price when released, the best current offer for ‘mint or good condition’ phones, the release date, monthly depreciation rate, and the total depreciation, using the first day of the release month for calculations. Figure 1 shows the monthly rate of depreciation from release date to today across those models in the list. While it does not represent the total Samsung line, it gives a better understanding of the monthly rate of value depreciation as the phones age.
Note: I personally have two smartphones, a relatively new (8/21) which cost $499 and a very old (4/14) S5, which cost $649. While the S5 is over 8 years old, it’s the phone I use the most because of its size, which is ~14% smaller than the newer model and doesn’t stretch out pockets. The monthly depreciation rate on the S5 is 1%/month, although it has no residual value
Samsung Smartphone Depreciation - Monthly - Source: SCMR LLC
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