According to the definition of Wikipedia, it means that goods of any type that have been used before or pre-owned. Used is the same to second-hand or pre-owned. All parts of a used mobile phone are original and not replaced, but at the same time accompanied by a certain degree of wear and aging.
In this sense it’s similar to “vintage” being applied to clothing. Another term you tend to see intermingled with pre-owned is pre-loved. The implication of those terms is that they are in generally good condition even though they’ve been used. There would be nothing explicitly wrong with them outside some minor cosmetic damage.
However, it’s always best to be skeptical of terms like pre-owned, pre-loved, and vintage. They are words designed to evoke a feeling in you that the items have been taken care of, but this isn’t guaranteed. As there is no agreed-upon definition, it varies across stores, sites, and sellers.
As with other second-hand items, understand the risks of purchasing a used item, especially when it comes to electronics or high-value purchases. Before committing, make sure you understand the seller’s return policy and any warranties offered. People would still like to buy the cheap iphones without contract, especially compared with the new iphone price, and the discounts offered by merchants.