Why was a previous generation iPhone with a busted screen worth so much on eBay?

Factual Questions
1

Several months ago an acquaintance I help with tech stuff from time to time gave me a 16GB 3rd generation iPhone (the one just prior to the iPhone 4) to use, destroy or tinker with as I wished. The casing had a good accompaniment of normal use dings and scratches, and it had a shattered screen. Interestingly the touch capability still worked perfectly over the 40% or so of the screen surface that was not shattered. All other functions of the phone worked fine.

I threw it in a drawer not thinking it was even worth my time to list it on eBay until I was bored and checked out the sold prices for broken iPhones and was shocked. Long story short I listed it, it was bid up ferociously, and it sold for around $240+shipping. This is not an exception due to my mad listing skillz, many similar busted screens iPhones sell for similar prices.

I have to admit I’m still curious about why anyone would pay this kind of money for a busted last generation iPhone? Why are they so valuable?

2

Because nearly all phones don’t sell at their real price. You get discounts because of two year commitments. Used iphones regularly sell for $200+ because the actual price is $500-1k.

Also, as a WAG, I suspect the iPhone is not available in all countries, or might be far more expensive than here.

3

Superhal is correct. The price of a 16 gig iphone 4 without a contract is $650 with a 2 year contract it is $200. The price of phones without contracts are in my opinion higher than they might be if people in the US bought more phones without contracts.

4

Plus the new iPhone 4 uses a mini-sized SIM card, so earlier iPhones might be more sought-after if you only have access to a regular SIM card.