This is a good thing. Ideally, companies wishing to sell their wares will compete like this. Consumers should have this type of knowledge rather than the supermarket style selling.

The problem occurs because no other industries are being forced to scrape the bottom like this. These people (iPhone devs) are earning the type of money you'd get from close to perfect competition, but they're having to buy things (food, TVs, etc.) at prices that aren't anywhere near that. The problem isn't that they're having to price down so much as all the other industries aren't having to do likewise. Their prices are being squeezed down by consumers having good knowledge and lots of competition, but they're having to buy things from people who aren't under that price squeeze.