Why are apple TV's so expensive?

So why are apple TV's so expensive?
I have been asked this quite a few times lately so here's the answer.
Apple TV2 or 2nd generation still runs on iOS5 which can be jailbroken
Apple TV3 or 3rd generation runs on iOS6 which as yet cannot be jailbroken.

So how do you know which model you have ?
The 720p model with was being sold up until march 2012 is and ATV2 (2nd generation)
The 1080p model is the model which is currently being sold and is commonly know as 3rd generation.

Many ATV2's are being sold for unto £200.