Unsatisfied with the same old phone selection from your local wireless provider? Shopping for a unique device that will amaze your friends and colleagues? Look no further than the world of online phone auctions.
Ebay and other online Internet auctions offer a staggering range of phone choices. The latest, greatest phones from other parts of the world are for sale, as well as some devices that have not even been commercially released. Wireless enthusiasts can even buy custom-built devices made by tech-savvy engineers, such as the “the only working Star Trek communicator in existence.” However, as with any sales channel unsanctioned by industry, shoppers must tread with caution.
“You’re not sure what you’re getting on Ebay,” said Robert Laikin, chairman, chief executive officer and director of mobile-phone distribution company Brightpoint Inc. “The carriers and the manufacturers want you to buy products from authorized channels.”
Nonetheless, Ebay offers the gadget devotee an excess of choices. A recent inspection of the almost 30,000 mobile phones for sale on Ebay turned up a handful of Motorola Inc.’s MPx smart phones, a device that has not yet been commercially released. The advanced device features Microsoft Corp.’s operating system and a unique flip-out keyboard and has sold for almost $1,600 in some Ebay auctions. Also available are Samsung Electronics Co. Ltd.’s advanced D500 sliding phone, Nokia Corp.’s 7280 and 7270, and NEC Corp.’s third-generation e808N-none of which is for sale by any carrier in the United States.
“There’s a pretty healthy market” for online phone auctions, said Bob Egan, head of consulting firm Mobile Competency.
Device fanatics even had the chance to buy a custom-built, flip-open communicator like those used on the original Star Trek TV series. According to the Ebay posting, users could place and receive calls on the Bluetooth-capable communicators through links to Bluetooth-capable mobile phones. The device sold for $504.63. Beam me up, indeed.
There is a significant downside to the Ebay channel, however. U.S. wireless carriers typically bundle their service and phones together to ensure the phone can’t be used on a rival’s network. Often referred to as “locking,” the approach protects the subsidies that carriers offer to keep phone prices low. Government antitrust lawyers at the Justice Department and Federal Trade Commission gave their blessing to such bundling more than a decade ago when the Federal Communications Commission took up the issue, although there are a variety of lawsuits opposing the practice winding through courts across the country.
Consequently, Ebay buyers must be prepared to wade into the bundling issue to match wireless service with their new mobile phones.
Most phones sold on Ebay are advertised as “unlocked,” which means that the phone has been disassociated from a particular carrier. Most carriers will not give out the codes needed to unlock their phones, but there are a number of small companies and Internet sites-such as JIC Electronics Ltd., Cingucell.com and MobileLiberation.com-that specialize in unlocking mobile phones. Once unlocked, a user could reconfigure the data settings and use the phone on another carrier’s network.
“It’s another sort of recycling method,” said John Jackson, a mobile-phone analyst with research and consulting firm Yankee Group.
Jackson said Ebay’s phone offerings probably will grow as more users replace their old mobile phones with newer, sleeker models. However, Jackson and others said online phone auctions like Ebay won’t likely have much of an impact on the country’s overall phone market.
“I do not see Ebay as a big sales channel,” said Brightpoint’s Laikin. He pointed out that most carriers offer a variety of phones at all price points, making online auctions unnecessary for most phone shoppers.
However, for those MPx or Star Trek fans who have the cash and just can’t wait, Ebay may hit the spot.
