An iphone is a mini computer that you can use to make phone calls. If you can make, with the same amount of money, another minicomputer with better components then it's clearly overpriced.Depends on your definition of overpriced, then. If it was cheaper or even similarly priced as it's main rivals, I say it wasn't. Of course it could be 10$, because of small chinese hands being forced to do it, but you are paying for years of experience of the guys who made it possible. And still, it was affordable for so many in USA, that it just became super popular. So not really overpriced. Reasonable and affordable, that's my term.
Of course it's so much different now, but it's not like they are really making new fans with this policy.
What apple sells is social positioning, exclusivity. If you buy an iphone, a macbook pro or whatever other think they sell then you're buying this.