Secondary iPhone market is thriving

We often hear about iPhone sales during Apple's quarterly earnings report, but we don't talk about secondary sales very much. This is the market where used iPhones in various conditions are bought and sold. I've been an active participant in this exchange, often selling my old iPhone or iPad to get the current year's model.

AllThingsD details a recent Consumer Intelligence Research Partners (CIRP) report which reveals that 53 percent of iPhone 4S owners got rid their old handset to buy the new one. These re-purposed handsets were predominantly iPhones (49 percent), followed by BlackBerry (21 percent) and Android (15 percent) phones. Interestingly enough, a lot of the iPhones (31 percent) were gifted, and a smaller percentage (18 percent) were sold.

It's not only advantageous for customers who can get an iPhone for less than retail (I sold my 16 GB iPhone 4 for $275), but carriers benefit, too. Over 89 percent of these gifted iPhones will likely be activated on a wireless carrier. Since the launch of the iPhone 4S, CIRP believes almost 11 percent of iPhone activations are second-hand phones.

CIRP co-founder Mike Levin says secondary sales of the iPhone is a mixed blessing for Apple. The company loses sales because people buy used instead of new phones. Apple, however, gets fresh new customers who will purchase content from the iTunes and the App Store. They may also stay iPhone customers and buy the next model when it's released.