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Why Are Stores Still Charging $200 for the Now-Dead iPhone 5?

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iphone 5 deals

At this point, you're probably aware that Apple announced two new iPhones yesterday.

In previous years, when a new iPhone debuted it occupied the top spot in Apple's lineup and knocked older generations down a single rung on the food chain. However, this time around, Apple opted to replace the devices holding the top two spots, dropping the iPhone 4S all the way down to a $0 price point, and discontinuing the 5 all together. As a result, Apple has a new phone at both the $199 and $99 price tiers, the iPhone 5S and the iPhone 5C, respectively. (All prices are with a 2-year wireless contract.)

Naturally, one might assume that, with Apple ghosting the iPhone 5, the handset will see great discounts from resellers. Yet this is not the tactic that the kindly folks at Best Buy and AT&T have taken. These two merchants have chosen to continue to offer the iPhone 5 for its full, pre-death price of $199.99, despite the fact that the newer 5S has already been announced at that price point. (Update: AT&T has since dropped the price to $99.99.) It's possible that this price retention is related to the fact that the iPhone 5S will not be available for preorder; perhaps these stores figure that they can squeeze a couple more bucks out of those who just don't follow tech news.

However, not only is the 5S technically a better value at $199, but also consider that the newly-announced iPhone 5C is a slight upgrade in hardware specs to the iPhone 5 as well — albeit with a candy-colored, plastic back rather than a slick metal-and-glass design — yet Apple only charges $99 for it. How can Best Buy and AT&T charge more for the iPhone 5, which is arguably an inferior device?

Conversely, other retailers have knocked the iPhone 5 to about $100, including Walmart (in-store), Verizon, and Sprint. This makes more sense, but is still curious given Apple's portrayal of the $99 iPhone 5C as a replacement of the iPhone 5. Are these stores implying that the differences between the original iPhone 5 and the iPhone 5C are minimal enough to still demand the same price for the iPhone 5? Or do these retailers recognize that some people still want an "adult" color iPhone (read: Black) for $99, even if that means getting a technically older product?

Ultimately, we're confused by Best Buy and AT&T's pricing, which goes against trends for electronics across the board. So before you or someone you know ends up overpaying for "old and busted" technology, keep in mind that you shouldn't pay more than $100 for the iPhone 5, and hopefully with time we'll see even sharper cuts from resellers.


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Jeff Somogyi is the DealNews Media Editor. Since working here he's written deals, features, promotional and newsletter copy, blog posts, as well as scripts for our videos. Follow him on Google+, Twitter at @sommerjam or his blog.
Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).
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5 comments
BboJim
The average consumer does not keep track of the latest technology releases, many people bought or will by the older models this week & next week without knowing there are new models. I see this happen all the time, REGARDLESS of which company it's from. It's even harder to keep up with Android phones when a new model comes out almost every other month from various companies!
valle07
because people are fools. put an apple symbol on a rock and sell it as a paperweight/doorstop for $19.99 and people will buy it.
icon_st
Because Apple is very good at innovation. Inventing ways to make more money. They give you a small feature which is dead and most other products incorporated it 2 years ago and ask you for extra money. The problem is Apple customers don't want to get out of their shell and read whats going outside.
applesucks
because apple said so, such a looser company. First they discontinue the phone and release the same phone with a different plastic body and still manage to keep the price fairly high. Its time the stupid audience understands the ripoff and stop buying their products
Noah
You shouldn't pay more than $100 for an iPhone 5... on contract. Off contract, I still expect them to sell for $350+.
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