7.9mm(1/2.3”) diagonal is not exactly huge, same or smaller than many smartphones.
There were of cylindrical fluorescent vacuum tubes that has rectangular imaging area at one end. Inch size notation like 1” or 1/1.2” for CMOS sensors denote size of equivalent imaging tube diameter for its imaging area.
“135 full frame”, “APS-C”, “Super 35mm”, “Medium format” on the other hand refers to film sizes, and thus respective imaging area dimensions.
The iPhone camera module is among most expensive parts in the bill of materials, at about $37.60.
The Apple processor is about $30. NAND and RAM? $40 combined. TrueDepth? $17.