Cost of an iphone varies. You have to be careful when you buy it since I have heard that some of the phones are used and are being sold as new. Thats very normal in gulf. I bought mine from Washington in December for $450(Apple, Model 3G, Storage 16GB, Unlocked. The same phone in Dubai varied in price from $800 to $1200. I think one place is DG Sharef(May be I am spelling this wrong). If you get it for $800, consider yourself lucky.