Earlier quoted context omitted.
I'm not sure the comparison is that significant. We tend to omit two aspects when we deride price changes: One is just inflation. No need to explain that. In 15 years at 3% annual inflation rates, the $500 becomes $780. Second is that the product has changed, massively. The better comparison is to a flagship phone-only, which is $30. Or to compare the iPhone to a range of products, e.g. a phone, but also a television…
Inflation does not apply usually to electronics. A 32" inch flat panel TV costed in 2003 twice or triple what it costs today. In 2003/2004 a Sony Ericsson P800 or P900 (among the first products that can be called "smartphone") costed more or less the same as an iPhone costs today.
Inflation simply means an inflation of the money supply. If you give everyone 1 trillion dollars tomorrow, hypothetically speaking, prices of all electronics would surely go up.
Similarly, if there was no technological advancement in the past 20 years, prices of flatscreen TV's would also have gone up in nominal terms due to an increasing money supply.
Instead, technology moved much faster to lower production costs than an increase in the money supply increased nominal prices. Doesn't mean there was no inflation or that it magically didn't apply.
As for your example of a Sony Ericsson, did you miss half of my post where I explain it's an apples/oranges comparison, or that better smartphones than the P800 sell for $100 (like the Moto G5, infinitely more value than the P800).