If you seriously think the subsidized price of a smartphone is its true cost, you are deluded. Remember the standalone PDA market? Top-end models cost between $500 and $1000. Add phone circuitry and it goes up. No wonder smartphones killed PDAs quickly. When the phone carrier is kicking in $500 or more of the cost, people adopted them quickly.
You remind me of the jackholes I dealt with when I was in cellular sales who bitched about the price of a second battery for a phone they got subsidised. "Why is the battery $50? The phone was free!" No, moron, the phone was $300, but the carrier paid that on your behalf to get you signed up for service.