Which doesn't include the overheads (engineering and staff, development and maintenance of back-end services, legal and compliance and all the rest) that you would normally plan to cover with the gross profit on the device.
It's a good question what exactly they meant by 'at cost', but it's at least going to be the plain hardware cost (plus maybe shipping), I suppose. And the point of the parent and GP was that the overheads shouldn't be that significant either, so it is still a bit of a mystery where exactly they spent that much money.
Which doesn't include the overheads (engineering and staff, development and maintenance of back-end services, legal and compliance and all the rest) that you would normally plan to cover with the gross profit on the device.