[smaudet]

The iPhone has a high-res display, hi-capacity battery, associated regulator hardware, multiple SoCs, cost of supporting a software/firmware engineering team for the OS/drivers, app developers, UX/Design experts, company markup....

Not cheap. I don't buy this argument - they have a nice image processor, sure, there's nothing special about their image processing. Sure, its not going to be cheap, I think you are vastly overestimating the quality... for a price point of 1K per phone, even at scale, you are talking maybe a 5th operating costs (200$) going towards supporting that.

Remember Apple makes its money from app commissions, more than the hardware, and AFAIK they don't operate selling hardware at a loss.

You will need a SoC team, yes, you are looking at a multimillion dollar company, doable with VC I'd imagine. Or a team of brilliant-yet-bootstrapping individuals, willing to work for less.