I purchased a second generation Apple TV a few years ago with some Christmas money. I remember unboxing and setting up the device and being blown away by AirPlay and iTunes rentals. Over the years, I’ve grown accustomed to Netflix, MLB.TV and NHL GameCenter streaming through that little black box.
Like all great devices though, my second generation Apple TV began to show its age recently. Streaming speeds slowed down in relation to new devices and I have found myself streaming games and movies on my iPhone or iPad instead.
So I decided to put my Apple TV up for sale last week. I googled and eBayed the current selling prices of second generation Apple TVs to see what I could get for it. And what I found truly surprised me.
The second generation Apple TV is the last Apple TV model that can be jailbroken. By jailbreaking the device, users can add different streaming channels and games to their Apple TV’s homescreen.
This unique characteristic causes jailbroken Apple TVs to skyrocket in price. Non-jailbroken Apple TVs will sell for less than their original $100 USD purchase price like any other piece of old technology. In contrast, jailbroken Apple TVs sell for upwards of $250 USD.
Not only could I sell my Apple TV and not lose any money on the device, I could actually make money. For how many other tech devices can we say those same words? The earliest Apple computers sell for boatloads of cash, but no three or four year old device can make you money beyond its original purchase price.
I had to learn about this flaw in market pricing. Of course, that rabbit hole led me to NPR’s Planet Money podcast. According to one of NPR’s latest episodes, the term arbitrage is defined simply as:
It’s finding a difference in price, a pricing mistake, you can exploit to make money. Arbitrage is a risk-free way to buy low and sell high. Everyday there are loads of people and sophisticated computer algorithms searching for an arbitrage opportunity, but they’re almost impossible to find.
In order to exploit the Apple TV’s arbitrage opportunity, I jailbroke the device by downloading a copy of the latest jailbreaking software and installed it on my Apple TV. This may break the Apple TV’s arbitrage characteristic as I had to do work to boost the device’s value. So, technically this isn’t free money. But it’s darn close.
NPR’s Planet Money hosts made one thing pretty clear: If you finds an arbitrage opportunity, the last thing you want to do is tell other people about it. Eventually, the buying and selling prices converge back to each other and any hope at turning a profit is lost.
Yet here I am telling you to sell your second generation Apple TV. If you use your Apple TV for those jailbroken purposes, by all means, keep the device. However, I’m willing to bet you can score yourself enough money to buy the latest third generation Apple TV (or maybe the fourth generation Apple TV in the New Year!) and take your significant other out for a semi-classy dinner.
I chose to exploit my arbitrage opportunity. At least I can scratch that off my bucket list.