Used Cell Phone, Anyone?

Haven't yet purchased a $599 iPhone? You're in luck. You can now buy the gadget directly from Apple for $100 less—that is, if you don't mind getting used goods.

Apple on Aug. 19 began selling refurbished versions of the music-playing mobile phone, which originally hit store shelves June 29. The consumer electronics maker joins a small but growing number of mobile-phone suppliers that are certifying, providing warranty support for, and selling used handsets in the U.S.

What's driving the demand? It's due in part to an increase in the prices for new phones. In the past several years, mobile phones' capabilities have expanded to include cameras, music players, and e-mail access. At the same time, their average selling prices jumped to $72 recently, according to Ross Rubin, an analyst at consultancy NPD Group. A few years ago, that price hovered around $50. Refurbished phones offer a way for carriers to placate users who can't afford pricier models.

Refurbished phones also present a way for carriers to get more consumers signed up for expensive data plans. They may offer consumers high-end devices at prices that are 10% to 50% lower than those for new models; but these models, such as the BlackBerrys and the iPhone, still require the same expensive service plans to function.