In the majority of cases cell phones can be resold. Most are resold in the US and some are sent to Asia, Africa and India.
Many phones are refurbished, restoring a phone to 100% working order, before being resold. If a phone cannot be repaired, then it is classified as 'Beyond Economical Repair'.
Phones that are beyond economical repair are disposed of in an environmentally friendly way.
To learn more about the process, take a look at our in-depth guide to cell phone recycling which answers this question in a lot more detail.