Justifying your shortcomings "because everyone else has them" is a recipe for failure, and doesn't get rid of the fact that there's a shortcoming. In this case, a rather significant one.
edit: I'm no expert and read too quickly the level 4 you mentioned, but at least isn't overall level 1 better than iphone's overall level 0?
Overall Level: 1
Edit: To those who downvote, please read up on the full FIPS 140-2 specification. http://en.wikipedia.org/wiki/FIPS_140-2