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The New York Times:

I was walking by the lengthy iPhone line outside the Apple Store in Soho on Sunday when I heard someone call out: “Turn in your old iPhone and get the new one free!”

I turned around and saw a bearded guy handing out fliers. They were from FreeiPhoneSwap.com and offered payments equal to the cost of a new 3G iPhone to people who turned in the old ones. Our conversation went something like this.

Me: “So what happens to the old phones?”

Him: “Well, we break them down for parts, strip out the LCD screens, they’re recycled in an environmentally friendly manner…”

I was unsatisfied, so I did a little research and found that the story isn’t quite so simple.

The company’s Web site repeats the safe recycling line, as does its press release. But Joe Weingarten of FreeiPhoneSwap, who has been soliciting used phones in Miami, gave a different account to The Miami Herald:

“There’s a very big demand, especially because there is a big shortage overseas,” Weingarten said. He added that he has 15 people working with him and he will be doing the same thing at stores in New York.

Freeiphoneswap.com spokeswoman Leah Handwerger said that there is also a high demand for the original iPhones that don’t require an AT&T contract to activate. The new iPhone 3G will only work once activated inside an AT&T store.

This indicates that FreeiPhoneSwap is feeding the vast gray market for iPhones that have been hacked to work on any compatible network, not just those owned by companies with which Apple has signed deals.

Read more.

Photo by The New York Times.

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Originally posted by Rich Whittle on July 29, 2008 in Ideas.

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