Apple iPhone 3G An eBay Cash Cow?


If you didn't feel like waiting in line or couldn't find the time to make it to the Apple Store " where bored Apple iPhone 3G hopefuls still congregated in some locations Monday " you can take to eBay to get your 3G fix. Same goes for the folks who want to stick it to ATandT and not re-up or sign up for a new contract with the carrier in order to get the coveted smart phone.

But with convenience comes cost. A search of the online auction house returned several hundred Apple iPhone 3Gs, both in the 8 GB and 16 GB variety. Many of those auction listings promise "no contract" or a device that's "unlockable," meaning it can be manipulated to work with a network other than ATandT's. Shrewd online sellers are drawing in bidders with the promise of free worldwide or free overnight shipping.

Problem is the cost. For the hundreds of devices currently available, many are hovering just under $1,000 a piece, with about $750 being the average. The black 16 GB model seems the most coveted, with bids already exceeding a cool grand. If you've got money to burn and want to go for a "jailbroken" or unlocked model that can work on other carriers' networks, that'll run you about $1,500 to start on the 'bay.

A search of the completed iPhone 3G auctions paints an even better picture, with one auction for a black 16 GB 3G iPhone closing at just over $2,500, and auctions for packages of up to four iPhones bringing in about $1,000 a device.

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To some, that may seem a small price to pay to escape ATandT's clutches and to guarantee they can actually get their hands on the device, as an iPhone shortage looms.

Rumors are circulating that 3G iPhones are in short supply now, after selling a brisk 1 million units in the weekend following its July 11 launch, which nearly quadrupled the release weekend of the original first-generation iPhone, which sold roughly 270,000 during the launch. According to Bloomberg, only three of 188 Apple stores " in California, New York and New Hampshire " actually had 3G iPhones on hand to sell on Monday, a shortage that analysts predicted could last well into August. Apple, for its part, has a Web site where iPhone suitors can check at 9 p.m. one day to determine which stores will have them the following day.

Currently, picking up a 3G Apple iPhone at an Apple or ATandT retail store costs $199 for the 8 GB model and $299 for the 16 GB model if the user signs a two-year ATandT contract. Customers already with ATandT will have to shell out $399 for the 8 GB 3G iPhone and $499 for the model with twice the memory. That option also requires a new two-year service agreement. ATandT also noted that it will also offer a no-contract option for users that don't want to be locked into ATandT, despite the iPhone not working on other networks. A contract free iPhone 3G will run $599 and $699 for the 8 GB and 16 GB models, respectively. Additionally, ATandT customers upgrading to a 3G Apple iPhone have to pay an $18 upgrade fee, while new ATandT customers pay double that.

Crunching the numbers, it seems patience and compliance can pay off, or at least save you a few hundred bucks in the process.

But for the masses that must have the latest and greatest device and must have it NOW, what's a little extra scratch? And for those who want to own the device, but don't want to shell out the dough to ATandT, ponying up the greenbacks may be the only alternative for that convenience. And, really, who can put a price on convenience?