I though with the 4s prices of the 4 & 3gs would drop. But at the moment a 4 second hand 4 is £350+ and new is still over £400 despite Apple dropping the price to £420.

When people are less prepared to pay those prices. It's eBay. If people don't pay, they don't sell. If people buy, the prices stay the same.

When the 4S comes out then there will be a rush for people to get rid of their 4,

and respectively, the 3GS

According to a survey few 4 owners will buy the 4S.

So the 3GS should fall further.

Well judging by the initial reaction to Apple's presentation, they shouldn't really be selling any at all, but the pre-order quantities seems to have sold out and Apple are quoting at least 1-2 weeks for delivery in all major territories. Looks like there are still a bunch of people who want an iPhone out there.

No one ever knows the pre-order quantities.

1-2 weeks could mean they have to be moved out of main storage and possibly have a firmware install and packaged..

I've seen a quoted figure for AT&T in the US of 200,000 pre-order, but I've no idea where that came from. I know a few people here who've ordered one.

They won't fall till there is actual availability of the 4S, which hasn't even been launched yet.

I seem to know a few people here who've bought a faulty iPhone 4 off ebay.
I imagine its a giant carousel where they keep returning.

I imagine A T & T announced that after getting permission off Apple.
Obviously its going to be a massive seller considering the large captive clientèle Apple has.

Check the ended auctions on ebay iphone 4's go for as low as £250 (fully working) but often higher.

I know one person who's preordered the iPhone 4S, and he's ordered 3. So I wouldn't take any preorder numbers for granted as there's a lot of people out there just buying to sell.