Besides the App Store launch, what really kicked off the iPhone was a price cut for the 3G model to $299, achieved through using plastic for the housing instead of (then expensive to make) Aluminium.

Costly parts that add weight to the first gen model are the curved glass outer display. This could be replaced with a piece of glossy plastic wth an anti-scratch coating. The Eyesight feature is easily sidestepped by just taking off the headset.