$200 is way too low. Realistically its like $400-500.
Why people spend 1k+ on an iPhone is beyond me.
Even if we assume that the cost of a DAP is $200 as argued based on the components, it is a little naive to think that the difference between the retail price and this cost price is the actual net profits (or even gross profits) earned by the manufacturer. The following are just some of the expenses which I can anticipate (I am no DAP manufacturer) :
1. Cost of R&D;
2. Cost of employees running the assembly/production lines;
3. Cost of admin and support;
4. Cost of running the production lines (electricity, upgrade and fair wear and tear);
5. Storage charges both at the factory/warehouse as well at warehouses all over the world where the stock is kept;
6. Transport and shipment charges from the factory to the port and all the way to the retail shops;
7. Warranty for the DAP;
8. Cost of unsold stock (there is a minimum quantity for each production run and it is inconceivable that the manufacturer will be able to sell 100% of its stock at the end of the day);
9. Cost and expense of running Sony Centres all around the world or ensuring that the Sony authorised dealers can earn sufficient profit after paying their own expenses;
10. Advertising & promotion (A&P) cost.
Clearly, adding 50% to the cost of the DAP will not be enough to even cover these expenses, much less generate "a profit which would cause any druglord having wet dreams".
As for your comment about iPhones, well... Apple is fortunate to have iSheep... fan boys who will pay almost anything for Apple products... NO OFFENCE intended... although I do not consider myself a fan boy, I do own iPads and a Mac (but not iPhones). Apple does make great products...