[reemrevnivek]

This is wrong. Raspberry Pi is a completely different domain than Arduino. There isn't a great price difference between the cheapest (<$1) microcontrollers and powerful SoCs like the Raspberry Pi's Broadcom part, which only cost $20 or so (either when buying in huge quantities or by pulling strings as Broadcom employees). In small quantities, that doesn't leave a lot of room to make a profit. However, the Arduino (and other products based on 8-bit micros) are and will always be lower power, lower cost, and lower complexity than the Raspberry Pi parts.

They're lower power because you can only flip so many bits with your battery, and running Linux at 800 MHz instead of an RTOS at 8 MHz is going to drain your little watch battery fast.

They're lower cost because each square millimeter of silicon costs money. Economies of scale can only take you so far.

They're lower complexity because you can write an assembly program in a few dozen bytes for the Arduino. On the Raspberry Pi, you'll need lots of libraries and there will be layers upon layers upon layers of abstraction. With increased power comes increased complexity.

Hacking on a phone has a huge barrier to entry and huge complexity levels. No one at Apple, Nokia, Samsung, or any other phone manufacturer can hold the whole code base in their mind at one time. Most Arduino sketches are two functions with just a couple hundred lines of code leveraging one layer of simple and understandable libraries. Furthermore, if you want to mass-produce your Arduino design, you can do it with home-printed PCBs and a Digikey or Sparkfun order. The chips used in the Raspberry Pi aren't available anywhere at any price in small quantities, and using them requires X-ray inspection equipment and professional 4+ layer boards.

Raspberry Pi aims to be the cheapest PC available. Arduino aims to be the easiest hardware platform to start on. Raspberry Pi is not a competitor to Arduino.