In theory, in a mature, competitive industry, there should be very very small profit margins. Innovation and barriers to entry, however, can protect profit margins; as can marketing and mind share.
Apple made the first really successful multimedia smart phone, and has been reaping huge profits due to their innovation in this field (even if you think "innovation" here only means bringing everything together in a shiny package). Unfortunately for Apple, the competition is catching up (or has caught up and surpassed, depending on who you ask). This means it will be much more difficult for Apple to maintain their profit margins.
The patent lawsuits by Apple against Samsung are an attempt to maintain a barrier to entry since Samsung's products have caught up functionally with Apple's. How would it look for Apple if the iPhone5 is behind (or merely on par) to the Galaxy SII? They may be able to get away with their margins for one more iteration, but their mind share will start to falter as soon as their products are not unambiguously superior (which they have mostly been in the smart phone market up until now).
In fairness to Apple, from their perspective, they have been buying parts from Samsung who then goes ahead and makes a very similar phone on the side. It is hard to compete with your supplier, and raises trust issues since they know what you are ordering etc. Fortunately, Samsung has enough money to defend themselves from these lawsuits, and clearly the desire to launch a large scale counter offensive.
And no, I am not an Apple fanboi, my phone is actually an SII (which is a great phone, imho).