Well first of all lets get something straight, you and your cousin are comparing the iphone 4 (launched within the last 2 months) to the n900 (9-10 months old). I'm not saying the n900 is inferior or outdate, but It's not surprising if it were right?

be reasonable the n900 should be compared to the iphone 3gs if at all. And if that's the case, respectively the iphone 4 should be compared to the n9 when that's release soon, that's a much better comparison.

PRICE:
From where I am (asian community, in america) if you don't get a free phone (or subsidized phone), the dealers give you $450 in a mix of account credit and gift cards. pretty much you don't have to pay for a few months AND you get a few hundred in gift cards. I bought my n900 for $470 after a mix of rebates and amazon cashback, so do the math, it only cost me 20 bucks cause i didn't get a phone with the carrier.

FEATURE
I'm sure theres a lot of people going to comment on this post so i'll just post 1 thing that the iphone can't touch, is the web experience, you know
e.g. when you go to the webpage with the popup menus (lets take http://slickdeals.net/ for example) when you hover over the navigation menu at the top it gives you a drop down menu, well you could get the same menu in your n900 browser using the cursor, just like you can in your desktop.
some people don't think that's a big deal but sometimes I don't even know how to get where i'm going without using that feature. and it's even more evident when using it in a panable menu inside another panable menu