You're way too entrenched in your opinion for any arguments to reach you and make you change, but if you open up, you'll see what we're trying to say here.
The motion is underpriced if we follow your logic. Period.
That phone does more than phones sold at it's price does. That's a fact.
Now, it does it because a few sacrifices where made: internal sd card size, no nfc chip, low resolution display... those allow the manufacturer to get it out at a lower price than it would have cost them otherwise. You could say the motion was smartly built.
Now the s3 was not designed for the cost conscious. It has that shiny screen, the expansive display, the nfc chip, dual microphones for noise cancellation, two location chips(GPS and Glonass), more sensors...
Those things cost more to put in the phone, and they were put there because the idea behind them wasn't cost, but flagship. The s3 is a statement. Not an investment. It's Samsung's way of tilting the eyes of buyers towards its devices. Even if one does not buy the s3, the extra clout Samsung receives from it makes its other phones sell(it's called the coattails effect). In light of this, the s3 is Samsung's Audi Quattro, to LG's Kia Rio...
Now from the other side of the equation, prices are set not only by cost, but by the law of supply and demand.
Customers want more of a product, the price goes up.
Inventory is too high, and manufacturer needs to dump more items out, prices drop.
All smartphones are pricy. Why? Customers want them. So, the manufacturers don't have to sell at cost.
The iPhone 5 will not remain at that ridiculous $800 off-contract. Why? It's overpriced, and no one is buying it at that price(demand is low). So, Apple will have extra inventory of the device it needs to dispose of(supply is high). Therefore, the price will go down.
Cost is only part of the price equation of a product. And not even the main driving factor. If it was, manufacturers would not need to be cost-conscious, and you'd have people living in houses where the floor is made of tv screens, and they'd get the money back easy. There's no demand for tv floors right now, so even selling tv floors below cost, no one would care to have it.
But, if you make a car that runs on air, looks like a Honda civic, but sells for twice as much. Would people buy it? In a heart beat. Why? Demand for that car would sky rocket. And the price would actually go up...
Why that's not readily available when the technology actually exists is another discussion that does not belong in this thread.
So, is the s3 expensive? Hell yes. Is it overpriced? Considering market response to it, no.
If people were to suddenly take a disinterest in smartphones, they'd start selling at cost, and even the motion would be overpriced.