Most of the replies here failed to point out what I think is the most important potential cost of an iPhone. No, it's not the $1500 or so that concerns me, but the time it takes away from other activities which is important to the development of a well rounded human being. There are 24 hours in a day, and when you spend time doing something it's always at the cost of not doing something else. Yes, the $1500 is a lot of money to many people, but it pales in comparison to the cost of time spending on the phone. And again, I am not talking about money here: I am talking about the time sitting there doing apparently nothing but actually thinking about life, daydreaming about what one wants to do when growing up, talking to friends face to face, walking the dog and enjoying the crunching footsteps on dry snow, etc. For me an iPhone is most of the time a consuming device: when you use it, you are being passive - you are not creating.
I am not saying that it's a bad thing to give a 13 year old an iPhone. I think it is a wonderful tool: dictionary, ebooks, wikipedia, maps, some games, etc. But like anything in life, moderation is the key.
But I am not judging OP or anyone here for that matter. I am just stating my observations and opinions. I have seen many you people spending too much time on the phone at the cost of real life interaction and I think it's very sad for humanity, and this comes from a man who love gadgets. See my signature.