EcoATM, the Automated iPhone Pawnshop

EcoATM kiosks scan used electronics to determine their value

These damaged devices look like trash, but to EcoATM, and its customers, they’re pure treasurePhotograph by iFixit

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By Caroline Winter

September 27, 2012 at 9:11 PM UTC

This article is for subscribers only.

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This article is part of the October 1, 2012 issue of businessweek.

Millions of people are ditching their phones and upgrading to the new iPhone 5. And Mark Bowles is expecting a lot of business for his company’s EcoATMs. The automated kiosks, parked in malls and grocery stores, allow people to exchange their used or broken electronics for cash. “It’s immediate gratification,” says Bowles. “There’s no 30-day wait for a check in the mail.”

About 150 EcoATMs are in operation in 10 U.S. states, and Bowles’s San Diego company, also called EcoATM, is installing two or three more per day, he says. Using cameras, artificial intelligence, and proprietary algorithms, the five-foot-high kiosks recognize 4,000 phones, MP3 players, and tablets with 97.5 percent accuracy, Bowles says. They assess physical and electrical damage and spit out a cash offer. The average going rate for a slightly damaged iPhone 4 or 4S is $175; a beat-up Samsung Galaxy S generally fetches about $60.