Not making profit and loosing money are two different things.
If they break even, it's still good.
They are also still making profit on the phones itself. It's just that they have other bills to pay, such as salaries, utilities, etc.
I'm in business, supplying to high end custom home builders. If we sold our materials at cost, which is not making money, nor losing money, just break even. We'd still close down, because there is overhead to take into account, you have to pay employees, pay for your warehouse, pay for the equipment, pay the vendors for the materials you purchase to make the products. You can't survive selling at cost, with no profit.