Except its hardware that people pay for. Of course all those other things are baked in to the price but I doubt anyone seriously believes Apple products are too cheap. Now maybe I wasn't being clear with what you were saying. I'm fully expecting a 5.5" device to be more expensive than a 4.7" device. But I think it would be a mistake for Apple to reserve certain hardware just for the 5.5" model as I believe there are people that will pay for these features but would prefer a smaller screen. I know in my case if the 5.5" model has better hardware just because then I'll keep my 5s and Apple doesn't get a sale from me.
I think the iPad Mini and Mini Retina are dirt cheap.
If Apple's profits are bothering you maybe you should invest in some Apple stock?
I did. I starting buying in Nov2012 at $590, then $550, $500, $450, $400. I just sold most of my stock last week and made about $40k. I'm still holding 200 shares and hope those will fund my future Apple purchases. I will be getting about $400 in dividends next year and will sell a few shares once the 6S comes out. I'm saving my $40k to buy the iCar when it comes out.