Sure, members of the public or small and medium sized organizations may have substituted, but if yours was the sort of organization that bought, say, a Cray Y-M

Sure, members of the public or small and medium sized organizations may have substituted, but if yours was the sort of organization that bought, say, a Cray Y-MP for $35 million, paying $3.56 million and putting this thing on a network would have been a bargain, which makes me think that the authors may not have taken the value of this being an integrated system into account. And even if they pegged the iPhone at exactly the same price as a Cray Y-MP they would still be low due to the iPhone's vastly lower power consumption. Finding out that this article was written by the American Enterprise Institute made me feel dirty until I reflected on the fact that nothing in the article appears to be grossly incorrect, and discarding an interesting article for some possibly bad political implications seems like a bad way to live one's life. Another thing that no-one has yet pointed out is that even this article's calculation could still probably be extremely low if the cost of developing iOS and the related apps are included.