Android phone

Although Android is a nice OS the phones with it are quite crappy and extremely expensive. I really do not understand why they are so expensive as they should be cheaper than the Windows Mobile/OS-X/Blackberry/Symbian counterparts because they pay less for OS royalties.
The hardware is also not something revolutionary - phones with equivalent hardware but without the Google brand cost sensibly less money.



I was offered today an HTC Magic from Vodafone - but I had to say that it did not stroke me with anything but the price - an outrageous 469 EUR.
I am wondering to what market those phones are addressing? Because despite the flashy new OS they will be niche players when competing to Blackberry/WM in business class and OS X/Symbian for feature phones.
iPhone 3Gs is still a better alternative to those HTCs