Apple Inc‘s AAPL iPhone helped take the technology giant to new heights since launching in 2007.
Today, original sealed iPhones are among the hottest items at auctions. They’re often considered a hot investment and collector's item, given the history of the bestselling Apple product.
What Happened: Over the past two years, sealed iPhones were selling for record amounts. But a new report unveils how auction houses may have been fooled.
According to cllct (pronounced collect), a website that covers the collectibles market, some of those smartphones were simply resealed to look as if they were brand new.
Cllct also explains several, easily verifiable points of reference to see whether the iPhone was sealed and authentic.
Auction houses can conduct tests like checking the serial number to see if the phone was registered. That could indicate if the phone had ever been removed from the box.
One high-level Apple employee told cllct that an active registration or an expired warranty indicates the seal is likely fake. And in several past auctions, cllct showed that sealed iPhones did not pass this or other aesthetic tests.
"It's such a nascent market, there simply isn't much known about its fool-proof authenticating methods," cllct editor and reporter Will Stern told Benzinga. "We're really just now learning tell-tale signs that will help authenticate seals in the future."
Stern said he hopes the cllct report helps provide "due diligence" for collectors and investors to perform before spending five or six figures on a sealed iPhone.
The report and new checking methods could also point to there being less authentically sealed iPhones available on the market.
"The amount of known public sales of sealed iPhones believed to be authentic is now lower than previously believed as some do not pass the basic tests as I reported in the article," Stern added.
Stern said one additional risk for collectors betting on scarcity and an increased price over time is an additional supply of sealed iPhones being found in warehouses somewhere.
During the investigation, Goldin Auctions removed a 4GB iPhone that was up for auction after it was revealed the phone in question had been activated.
"Goldin uses third-party experts wherever possible to authenticate everything we sell. And if it is brought to our attention that those third-party experts are not qualified to authenticate the item in question, we will stop using them," Goldin Auctions founder and CEO Ken Goldin told cllct.
Related Link: Steve Jobs-Signed Check Sells For Over $135K Alongside Apple Rarities Like Sealed iPhone
Why It's Important: Apple memorabilia and collectible items involving co-founder Steve Jobs have attracted top investors.
Popular YouTuber Marques Brownlee posted a video of unboxing a sealed original iPhone in 2023. The video has over eight million views and saw Brownlee discuss that there have been cases of fraud with resealed iPhones.
Cllct said the world record sale of $190,373 in July 2023 for a sealed 4GB iPhone was consigned by a member of Apple's original engineering team helping provide "the most air-tight provenance possible."
Sealed iPhones have sold for less than the record in recent months. Yet, the Apple product remains popular, and the new report could lead to prices of authentic iPhones being more volatile.
"The iPhone changed all of our lives," Stern said. "It's as important a technological advancement as the airplane or the television. The original iPhone represents the genesis of this new era we all live in today. Plus, sealed iPhones shouldn't exist logically. How many people bought the iPhone in 2007 and never opened it? Very few."
Stern said the iPhone remains a popular item for collectors of Apple products and fans of the technology company.
"For collectors, it's just like buying a Star Wars toy or a Superman comic. Apple is one of the most important brands in the world and has legions of diehard fans. To many, a sealed iPhone is the equivalent of a 1st edition Harry Potter book, it's the product that spawned a beloved, worldwide brand."
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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