iPhone 5S base cost is estimated around $200-$300[1], so iPhone for £100 should be either seriously inferior model or seriously subsidized. Apple does not need to subsidize it - they sell fine as is. So either carrier subsidizes it and gets their money back in contract fees, or you are paying the cost plus margins of all the middlemen (unless you manage to buy it straight from the assembly line, which you can't).
[1] http://www.asymco.com/2012/02/22/the-iphone-manufacturing-co...