Initially the iPhone 8GB sold for $600 on-contract, which worked out to an ASP of around $800 or higher, and average TCO over 2 years of $3k.
Also it was announced 6 months prior to release, was often sold out after it's release, and completely unavailable in most countries until months or years after initial release.
It was very much a halo product (at release, less so over time).
In fact, I would probably consider it as one of the most successful halo products ever - as it not only cast it's halo over the entire Mac+iPod product line, but it eventually became the revenue driver of the entire company.