All assets that are in demand are inflated. Think about it. If everyone sold their stocks at the same time the price would crash. If everyone sold their bitcoin at the same time the price would crash. If everyone sold their gold at the same time the price would crash. If everyone sold their houses in a certain area the price would crash in that area.
This is why things like market cap are not an accurate measure of value. Value demands on the health of the larger economy.
Interesting that you mention the first iPhones. Back in those days it truly was a revolutionary product with more utility than a Blackberry (another popular brand at the time) as evidenced by the fact that no smart phone nowadays has a physical keyboard.
Btw the original white design was meant to mimic the style of kitchen appliances, bathroom fixtures, and laundry machines. It was a way of communicating that the high price was justified because it was like buying something permanent that would last for years. Kind of a genius marketing decision that flew in the face of the cheap disposable electronics popular at the time.
This is why things like market cap are not an accurate measure of value. Value demands on the health of the larger economy.
This is one of the emotions / social factors well played by iPhone in the early days. While it was not the best option from functions, from what it could do, it was priced higher than the same Android-based models. Apple refused to compete in the same old “mobile phone” space, and made out of it a life-style or new generation, where you can be upper class, while not being from there actually (google the stories people selling kidneys or taking loans to buy the new iPhone). And they succeeded! Now if you don’t have the newest iPhone – you are not cool, and “even more poor than me“, while the real elites would be buying Vertu and those phones, “fake rich” happy showing they are rich, while not being one of them. And happy to overpay for it 
Interesting that you mention the first iPhones. Back in those days it truly was a revolutionary product with more utility than a Blackberry (another popular brand at the time) as evidenced by the fact that no smart phone nowadays has a physical keyboard.
Btw the original white design was meant to mimic the style of kitchen appliances, bathroom fixtures, and laundry machines. It was a way of communicating that the high price was justified because it was like buying something permanent that would last for years. Kind of a genius marketing decision that flew in the face of the cheap disposable electronics popular at the time.