I'd be very surprised if Apple constituted a monopoly in the phone (or even smart phone) market.

That's because they're nowhere close to a monopoly in the smart phone market.

And if they tried to sell ads on the cheap, they would probably be nailed with a suit as well. Another version of "dumping."

im not implying selling them on the cheap. they can offer better deals to devs, since it's not their core business. it's like google offering the nexus one at a bargain basement rate if they could. I'm not implying a loss leader either, but somewhere close to break even. Essentially it would replicate what they did with iTunes in terms of economics.