Smartphones are expensive.
The average price of an Android device is about $250, while an iPhone is over $600. That's way, way more than these devices cost to build.
But if it's any consolation, think about this: Some of the apps that come preloaded on your handset -- camera, GPS, clock -- can perform services that would have cost you a small fortune in the 1970s and 1980s. Observe this chart, from Abundance: The Future Is Better Than You Think, a 2012 New York Times bestseller by Peter H. Diamandis and Steven Kotler:
Isn't technology wonderful?