Re : additional cost

"IIRC a CD of the machine-readable source with each phone would satisfy the GPL but would be an additional cost to the manufacturer."

... regardless of arguments over the benefit of a CD over a URL, the fact is that distributing a CD with the source code would not be a significant extra cost relative to the cost of the phone. In fact you're talking pence. Using that O/S on their phone saved them more than that.