Officials at a Virginia school district tried to sell 1,000 four year old Apple laptops at well below market price. The result: chaos, and $250,000 in lost revenue.

According to Richmond’s NBC 12:

What started as a sale turned into a mob scene as thousands of people pushed their way through the Richmond International Raceway gates to buy a $50 iBook laptop computer from Henrico County Schools Tuesday morning.

An estimated 5500 people were on hand when the gates were opened. What followed can only be described as chaos as dozens rushed to get to the head of the line. People were trampled, shoved and pushed.

… Despite the chaos, Henrico County officials insist there was “adequate planning.” Paul Proto with Henrico County General Services says in preparing for the event, “all that was necessary was done.”

Really? Here’s something that was “necessary:” go to eBay and find out what the laptops were actually worth.

We found the specs in this pdf. Of 57 listings on eBay for recently closed sales of similar iBooks (G3, 466mHz or faster, 12″, priced > $50, keyword 500), the midpoint sale price is about $340 (try this link to the eBay search — it may not work). Backing out eBay fees, etc, and discounting slightly for what may be excess wear and tear, the school district could have netted about $300 each.

They walked away from $250,000 in incremental proceeds. Could they have used the money?

The $50 price was so crazy that it was lower than the value of the Wi-Fi card in each computer. As commenters at The Unofficial Apple Weblog noted, the old Airport (802.11b wi-fi) cards inside each laptop had value in and of themselves — according to our eBay research, about $65 each. Yes, more than Henrico County sold the entire laptop for.

This is a “Wisdom of Crowds” moment — the people lined up to buy the laptops knew their value better than one or two Henrico County bureaucrats.

Perhaps the county officials should have paid more attention in their third grade class. According to Henrico County Public School’s Student Learning Goals, “the (third grade) student will identify examples of making an economic choice and will explain the concept of opportunity cost (what is given up when making a choice).”

Or maybe the third graders can be in charge of the next auction. They’d probably do a better job.

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Update: The Richmond Times-Dispatch has info on what the riot cost the county in manpower, plus photos.

Update 2: our follow-up post here.

Update 3: The Macs are being replaced by Dells; school officials may wish they read this post in Good Morning Silicon Valley before switching: Dell’s “Extended Buyer’s Remorse Program” shows results.

*We excluded the ones prices below $200, which were listed as broken or fixer-uppers. Also excluded ones > $500, which had MS-Office included.

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This entry was posted on Wednesday, August 17th, 2005 at 2:09 pm by A Senior Administration Official and is filed under I knew I'd use my Econ major. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.