That completely ignores R&D costs, basically. They designed the chip themselves, so there's R&D costs there. They also wrote the software, and may have had the

That completely ignores R&D costs, basically. They designed the chip themselves, so there's R&D costs there. They also wrote the software, and may have had the touch screen custom-designed or something (correct me if I'm wrong on that, I just know it's supposed to be unusually pretty and precise.) So yeah, if they sell an infinite number, there average profit margin should be $208. Realistically, a reasonable chunk of that (I'd guess well under half, but probably not negligible either) goes to designing the product and the components.