I doubt the entire iPhone draws 20W. Did you mean 2W or 0.2W? A 400 MHz ARM11 with memory controller and onboard cache should be well under 0.5W.

The bonus for Apple is chucking the PA guys at the ARM architecture more than a decade after they produced StrongARM. I can see a 1GHz+ dual-core CPU with all the peripherals required to run an iPhone fitting into that 0.5W envelope. 

Just add flash, RAM, screen, camera, case and battery. It will do voice recognition, all the web stuff, video etc. and run for 3 days playing mp3s..

Using an ARM cpu that someone made is quiet diferent from desinging one that meets EXACTLY your needs.
(maybe hardware accelerated copy & paste function ? XD )

Isn't it widely understood that the iPhone already uses an ARM architecture for its CPU?

Wikipedia lists it as a 620 MHz ARM 1176,[24] underclocked to 412 MHz

" The chips have a great reputation for low power consumption, typically drawing less than 20 watts each, and are extremely customisable."

Try 1 watt mate.