Windows 7 costs $1.20 to make. 20 cent dvd + 20 cent packaging + 80 cent booklet (or whatever is in there.)
A high end CPU costs below $3 in material costs. (Numbers purely guessed)
Given these examples I find it wrong to accuse Apple for selling the iPhone at that price point. At least to me these "Product X costs Y USD in production" articles sound a bit accusing.
Here in Germany studiVZ is the leading social platform. studiVZ started off as a clone of facebook and they're still pretty much stuck on the initial version.
facebook only recently started to slowly gaining traction here.
Given that facebook is functionally (news feed, apps) and visually (less obtrusive adds) way superior to facebook the main reason for the slow adoption is surely that "everybody" is on studiVZ.
Given that facebook is real good executed I don't see any way it's getting serious competition anytime soon.