I think the iPhone is perfect for those that don't mind a closed platform, do not mind almost no customization and are OK with spending a massive premium over all other phones on the planet. And let's face it, the iPhone just looks better in your hand while you're out buying a 7$ coffee not to mention the perfect fashion apparel item for your horned rimmed glasses.
Spending a massive premium on the iPhone is optional. Just like any other phones available they have different tiers. You can get an iPhone 5 for $200, iPhone 4s for $100, and iPhone 4 for free. How is a free iPhone a massive premium?
The Galaxy S3 was $250 at release, $50 dollars more than any subsidized iPhone at release.
I fail to see the price difference here.