I imagine they test em, clean em up, reset em to factory settings, and send em to stores.
(They better do, I've heard a few tales of people buying phones, laptops etc preowned, only for little jimmy to find the porn folder
)
It's not an iThing, but I just moved from a monochrome, call n text only nokia, to a refurbed Samsung Galaxy i5500 android phone, cost me £20+£10 in credit.
They're still being sold new for around £80.
I think a lot of it is down to a group of people who simply must have the latest in everything, I'm not going to really criticise them, as early adopters are essential for greater technological progress, but damn they do seem to have more money than sense.
I'm always a couple of years or a generation behind, and don't feel I really miss out.
I just got my new phone, and my 360 came this year, along with my flat screen TV, I'm running an older style quad core PC, not an i3 or i7, and a £40 video card, and I seem to be able to play anything, just maybe not with every slider at max.
In doing so, I've not spent a million quid on shiny gadgets.
I'm all for new tech, but if you want to save some money, being slightly behind the curve aint so bad, and the tech to price curve gets pretty damn steep near the cutting edge.