Why are used iPhones so expensive? What does unlocked mean?

I just sold my 2 year old iphone 4 for $240 on eBay. Why are they selling so high? What do they do with them?

Unlocked means thers no 2 year contract or bills

Unlocked means rooting for Android, jailbreak for iOS.
When you do that it VOIDS your warranty, but allows you to have unlimited features such as un-installing pre-installed apps. You also risked have your phine bricked, meaning it is useless others words it is just like broken phone.

IPhones hold their value pretty well. An iPhone in the UK, without a contract to a mobile phone operator, costs about $900.

When you take out a contract for an iPhone you are paying for the iPhone and also the mobile phone tariff for minutes and data.

An unlocked iPhone means it can be used on any network.

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