Today 10 years ago I went to Poland to buy a Phone with pre installed #Firefox OS on. The Phone was a Alcatel One, so very shitty. Two years later I installed Firefox OS on my Nexus 5 instead.
It was a very good concept, but sadly rolled out on too shitty hardware so it never caught on.
You can probably have much larger profit margins on that $500+ phone
Cool, then go ahead and sell the 500$ phone to a nigerian farmer.
Getting a foot into the high end market is almost impossible, the barrier to (successful) entry is gigantic. Tackling the underserved low-end market is a much more viable strategy. And now comes the kicker: Not being able to enter a market is (and this will shock you) even less profitable than entering a low-margin market.
I really don't intend that as an insult, but you're looking at this from a very western, rich, profit-oriented standpoint. Mozilla never was about profit and the world is larger than our western rich kid bubble. 500$ is enough to feed a person for an entire year (or more) in some countries.