Hot Market for iPads, and Not Just Apple’s New iPad 3

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Each time a hot new Apple product appears, it causes a ripple effect in the marketplace, with a flurry of consumers buying, trading, selling, and reselling all versions of the item. The expected introduction of the iPad 3 on March 7 has already caused a mass trade-in of older iPads, and all signs point to a red-hot market for iPads: original, iPad 2, and iPad 3 alike. Haven’t we seen this one before?

Last March, a flood of used iPads hit the resale market, prompted by (what else?) the introduction of a new iPad (#2). Sub in a 3 for the 2, and it’s pretty much the same story right now—only now, since there are not one but two existing iPad models, and there are far more iPads in people’s homes, the amount of buying, selling, trading in, and reselling has hit the roof.

Apple Insider reports that the new iPad’s rumored upgrades, which include superfast 4G LTE connectivity and Siri voice recognition, are expected to help Apple sell 55 million units (all products, not just iPads) in 2012.

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With all those new iPad purchases, a massive reshuffling of older tablets is likely to occur. Or rather, is already occurring. Sites that pay cash for trade-in electronics—NextWorth, Gazelle, eBay’s Instant Sale—have all gotten major bumps in business due to the coming of the iPad 3, presumably from owners seeking to upgrade to the new model and/or cash in on their merchandise before the value sinks. eBay reported 125,000 tablet trade-in offers from February 1 to 23—a tenfold increase from the same period in 2011—and 97.6% of those were iPads. Likewise, the number of consumers trading in iPads at Gazelle and Nextworth has risen by as much as 500% in recent days.

With eBay’s program, the most popular iPad to trade in is now the iPad 1 Wi-Fi + 3G AT&T, followed by the iPad 1 Wi-Fi only. At last check, owners could expect to get $225 and $200, respectively, for these items. An iPad 2 16GB Wi-Fi, meanwhile, commands as much as $275 at eBay’s Instant Sale.

It’s wise to shop around before selling. SmartMoney reported last week that NextWorth and Gazelle were paying $272 and $260, respectively, for that same iPad 2 16GB Wi-Fi in “good” condition.

Those prices in the SM post, mind you, were before Best Buy announced it was marking down the iPad 2 16GB by $50 over the weekend, bringing the price for a new model to $450. The marking down of new merchandise seems to have caused a decline in what buyers will pay for used goods. In a more recent price check at Gazelle, the site was offering just $230 to buy that same unit from consumers.

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Prices for buying and selling older iPads will fluctuate with supply and demand, and in all likelihood, both will decline further once the iPad 3 is officially on the market. Wharton marketing professor Barbara E. Kahn compares the ebb and flow of iPad prices in the marketplace to that of cars:

When new models arrive, car dealers offer price discounts on last year’s models. However, the difference between cars and tablets is that if the car is new (but the previous year’s model), it is still worth a “new car” price (unlike a used car, where some of the price discount is attributable to added mileage), she notes.

As for attempts to get a special price on the newest iPad, good luck with that. Apple has a long history of not discounting until it absolutely must. Dealnews suggests an over-under of six months for the time at which any iPad 3 will be discounted. That’s based on what happened with the iPad 2: Half a year after it was first introduced, some retailers knocked original prices down by $50. That’s probably not enough to make many consumers want to wait.

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Also, keep in mind that less than six months from now, it’s likely that there will be another new Apple product—the iPhone 5—begging for your attention, and your dollars.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

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