What would push it over the top, for me, would be if you offered a thermometer like this one:
http://hmb-tec.de/iPhoneApps/BBQ-Thermometer.html
that plugs into the headphone jack. Ideally yours would be lighter weight and would float on water, but the peripheral exists already.
This would add great functionality; it would now become 'perfect tea. anywhere. anytime.' The phone would chime when the water is ready, then simply pour, the phone chimes again, tea. Doesn't matter if you're by a campfire, in an office, in front of a stove; perfect tea.
Make it an attractive peripheral that matches the rest of the Apple way and you will sell a lot of these gizmos, at more than $1.99 - 30% profit per gizmo. Perhaps a kickstarter to pay for production, a la the Glif? I'm in for one, possibly two, in advance.