The iPhone 4 is priced for contracts, with a $0 (actually less -- usually the "buyer" gets credits) entry-fee. In the North American sense -- or in much of the world where the top selling devices are overwhelmingly $600+ -- it is absolutely "ultra discount": it's a three year old device!
As no-contract pricing starts to become competitive, Apple will do what is necessary with their discount entrant. But right now for a guy walking into Verizon or AT&T or many other cell providers around the globe, the iPhone 4 is as cheap as they can get.
As I said before, the ASP of Samsung smartphones approaches $500. This myth that everyone else is desperately pitching dollar phones is just nonsense. Yet so far this little thread offshoot has seen Apple compared with Lexus, Louis Vuitton, and Bentley.