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November 18, 2005

Used iPods Are Hot E-Commerce Item

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The new iPod Nano isn't the only Apple MP3 player that's hot: A surprisingly active business has sprung up around used iPods, with heavy activity on eBay and, as users looking to upgrade seek to dispose of their older models and make some money in the process.

Why are old iPods so popular? For one, they're considered a novelty in some circles. The change in Apple's product mix has also opened up after-market possibilities. For example, the iPod Mini was recently discontinued, and some buyers want that specific model.

"Apple wants to keep the iPod family to only three iPods," said Gene Munster of Piper Jaffray, a technology research company. "Sony has a wide family of MP3 players; too many players. Apples believes in making the product family as simple as possible."

According Kaan Yigit of Solutions Research Group, the bar in the iPod category is being raised every six months, as smaller units with greater storage capacity are released. Style also comes into play. "The iPod is as much about fashion as it is technology, so keeping the product line fresh is an important consideration," he said.

Munster estimates that 90 percent of used iPods are sold on online auction leader eBay. Tejash Unadkat of San Francisco sold his 20GB color iPod on Craigslist. "I sold it in a few days for $190," he said. He is now shopping for another iPod, but one that is more tailored to his habits. "I don't need an expensive unit." According to Gregg Radell of PodSwap, a company that offers cash for used iPods, people want to sell their iPod for a variety of reasons. "Their iPod is absolutely fine but they really want the newest, latest, most high-tech version. For example, a 40GB fourth-generation seemed really cool until iPods started having color screens. Suddenly there was more to have."

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