Yes they are "second tier" phones. The world is buying 2nd tier phones and even the average selling price for Samsung phones is around $182 (http://www.businessinsider.com/apple-and-samsung-sell-phones...). In the grand scheme of things, an insignificant number of people are buying high end Android phones.
Which is exactly the point. $500 is very competitive with the cost of the Galaxy/Pixel -class phones.
At $200, the 1-2 generations behind used iPhone is very competitive with the slower, cheaper Android phones that you can buy new.
The phones you're comparing the iPhone to are second-tier phones. But, as I said in my original comment, second-tier iPhones are resale, not new.
Yes they are "second tier" phones. The world is buying 2nd tier phones and even the average selling price for Samsung phones is around $182 (http://www.businessinsider.com/apple-and-samsung-sell-phones...). In the grand scheme of things, an insignificant number of people are buying high end Android phones.
Most of the devices at that price tend to be underwhelming performance wise, so here's that.
And they are good enough for most Android users.
For instance, my son has one of these and it's a perfectly capable device.
https://www.amazon.com/Moto-PLUS-5th-Generation-Exclusive/dp...