iPad announcement spurs trade-ins of older iPads

Roger Yu, USA TODAY | USATODAY

The shelf life of the trophy gadget isn't what it used to be.

Apple surprised the tech world with a new iPad model (the fourth generation) Tuesday, sending trade-in volumes of the previous iPad (iPad 3) — just 7 months old — up sharply.

Professional gadget buyback companies Gazelle and NextWorth on Wednesday were offering about $250 to $260 and $190, respectively, for used iPad 3's and iPad 2's with 16 gigabytes of storage and Wi-Fi only connectivity.

IPad owners willing to deal with the hassles of selling gadgets on their own were fetching higher prices on do-it-yourself markets, such as eBay and Craigslist. For example, used 16 GB Wi-Fi only iPad 3's were selling for about $400. A similar iPad 2 commanded about $300.

A new product release by Apple never fails to stir the secondary market of owners looking to upgrade, and the latest industry data underscore the buzz.

In the 30 days before Tuesday's announcement, the number of iPad owners seeking quotes for trade-ins rose 80% from the previous month at Gazelle, according to Anthony Scarsella, Gazelle's chief gadget officer.

Consumers had generally assumed that Apple would release only a smaller version of iPad, the Mini, which was indeed unveiled on Tuesday. As a result, those who owned the iPad 3, released last March, had steered clear of the early frenzy on trade-ins. A vast majority of early buyback quote requests were from those who owned earlier models — the original iPad and iPad 2.

But iPad 3 owners came out in droves once Apple told the world that their months-old tablet would be replaced with a model that has a sharper screen, a faster processor and an improved high-definition video camera, Scarsella says.

Those new iPads can be pre-ordered starting Friday and are in stores starting Nov. 2.

About 70% of trades that were registered on Gazelle on Tuesday came from iPad 3 owners, Scarsella says. "The numbers completely flipped after the announcement," he says. "We were just expecting the iPad Mini. When (Apple executives) got on stage, people started trading iPad 3 in record numbers."

In total, Gazelle made 140,000 offers to buy back iPads on Tuesday, a 700% jump from the day earlier.

NextWorth also saw a spike in trade-in requests, says Jeff Trachsel, the company's chief marketing officer. About 66% of trade-ins were from iPad 3 owners.

"What we're seeing is that early adopters who have to have the latest and greatest are taking advantage of the high value of iPad 3 to subsidize iPad 4," he says. "The big jump around the event was iPad 3. I attribute that to the surprise of iPad 4. This one caught people caught off guard."