Gil,
"...'fair price' is one that approaches a market clearing price, in a relatively efficient market, driven by supply and demand."

You are now arguing that the iPhone initial price was NOT FAIR. The price would not have dropped so precipitously if it had been "fair", using your definition. (In a very efficient market, when the price was high more firms would have been selling it, lowering the price to just above the average total cost of producing it). Apple would not have had to change the price at all, it would have fallen by itself.

When demand fell, in a very efficient market, many firms would have left the market leaving the price approximately the same (at just above the average total cost of production). All firms buying the iPhone from Apple would have continued to pay approximately the same amount (close to the minimum average total cost).

The fact that the price fell precipitously shows that the market was in fact not that efficient.In a truly efficient market, it should be the number of firms in the market that changes, not the price of the good. The price of the good (n a truly efficient market)should stay at just above average total cost when demand for the good changes.

Gil, I'm not sure your concept of "fair" is fair to the brilliance of the marketplace.