Holy Crap. Dell is going into iPod resale, err, I mean, "recycling"



This has to be a joke. What? Michael can't make any money on the Dell DJ, so he's asking iPod users to trade in their MP3 player for one of his, the Dell DJ 15gb.

The first question I have about the new Dell DJ "promotion" has to be, What will Dell do with the millions of iPods they're going to receive in response to their offer. I mean, the response will be overwhelming, won't it? "Recycling" my as*. Michael's got a plan.

Dell must know that the iPod has a notoriously high resale value. All of Apple's products, in fact, enjoy legendary resale values. One peek at ebaY's completed auctions will reveal the fact that the iPod sells second-hand for about one-third to three-quarters of its original selling price. Often more. So, what gives?

Used iPod 15gb's sell routinely for over $300. 10gb iPods sell for over $275. I mean, the original iPod, a 5gb affair, sells used for an average of $175. That's just $25 short of the brand new Dell DJ 15gb. Who are they kidding? This 5gb iPod actually sold for more:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=67835&item=5703544319&rd=1
So, after you do the math, Dell comes away making more money via the "promotion" than they do selling the Dell DJ straight out:

Promo math:

iPod 5gb: $150 (low estimate at resale)
Dell DJ: $99

Total: $250

Dell DJ a la carte:

Dell DJ: $199

Can you imagine how BAD Michael wants you to send in your fat iPods? I won't be sending in my '40, but he'd make a mint off me if I did.

Someone from Dell must have come to Michael with this grand plan, and on paper I'm sure that the margins Dell will realize from their iPod trade-in program will exceed the margins they enjoyed selling the Dell DJ all by itself.

You know what they say, if you can't beat them join them.




Posted: Wed - June 30, 2004 at 05:14 PM          

©