@johnpowell, that may be. I don’t know manufacturing complexities. There’s something like 12–15 radio chips in an iPhone, plus the OS components to drive it all, R&D costs, yadda yadda yadda. It adds up. Plus ongoing support/maintenance, etc.
It’s telling that the Pre has the same kind of non-contract price. As well as offerings from Nokia and others. And of course, it’s a top-tier offering in any case.
All that adds up (with hefty profit, to boot)