iPhone 5: Sink or Swim Time for GameStop
GameStop, once a gamers’ destination, is in the process of transforming its storefronts into Apple resale stores. That’s a strategy that investors seem to like and has turned around its declining stock.
The iPhone 5 represents the first major test of the strategy, as it has helped flood the market with older iPhones. Type “used iphones” into Google, and GameStop is the third option to come up. Its link takes searchers to a page featuring refurbished Apple products including best sellers like a $120 iPhone 3G 8GB, a $140 iPhone 3G 16GB, and a $300 iPhone 4 16GB. The site also offers a free iPhone 5 case to people who trade in old iPhones, iPods or iPads, while supplies last.
GameStop has some strong competitors, many with eBay (EBAY) stores. They include Gazelle, which has earned high marks from customers trading in products. Its eBay store recently sold an iPhone 3G 8GB for $93 and offered another for $122. PCMag ran an article with a list of options.
In its most recent quarterly filing, for the quarter ended in July, revenues fell to $1.55 billion, down from $1.74 billion a year earlier. Its revenue growth is negative.
GameStop’s earnings now trade for 58% of Apple’s earnings.