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Apple Trade-In Market Soars Ahead of iPad 3

NEW YORK ( TheStreet) -- Apple's (AAPL - Get Report) iPad 3 is just a rumor for now, but already tablet owners are looking to trade in current models of the device.

The move comes as the secondary market for Apple products explodes while consumers look for ways to upgrade to the buzziest and shiniest new gadgets.

The secondary market for Apple products is exploding.

Since reports began circling in early February that Apple would soon announce the iPad 3 -- featuring a faster processor and higher resolution display than its predecessor -- secondary electronics buying company Gazelle saw a 500% jump in iPad trade-ins.

Boston-based Gazelle saw around 10,000 iPad trade-ins following the launch of the iPad 2 and expects the number of swaps to double or triple this year during the tablet's third iteration, said Gazelle CEO Israel Ganot.

Gazelle is just one of several companies, including upstarts like NextWorth and YouRenew and giants including Amazon (AMZN - Get Report) and eBay (EBAY - Get Report), hoping to tap into the estimated $50 billion market for used electronics.

Spurred by a surge in demand from consumers looking to sell old versions of the iPhone and iPad to subsidize their purchase of upgraded devices, Gazelle's revenue grew 67% last year to $35 million.

Ganot expects the iPad 3 to have a major impact on Gazelle this year and is looking to drive attention to the business through TV ads.

"If you think about the iPhone introductions, the iPad and the Kindle, new electronics come out on the market every single month it seems," Ganot said. "Consumers are conditioned to buy new devices because they want the latest and the greatest all the time."

Billerica, Mass.-based NextWorth said that it saw a 400% surge in traffic on the iPad section of its site following reports about the iPad 3, said NextWorth chief marketing officer Jeff Trachsel.

The site will pay around $300 for a 32GB iPad 2 with 3G in good condition.

Transchel said he expects the majority of consumers to trade-in the original iPad, rather than the iPad 2.

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