Then Apple is using its success in one market (Selling phones) to price-dump in another market (music).

It would be the poster child of an anti-trust case.

Does this view still apply if Apple considers the music subscription as part of the product/device?

Consider the countless users that, perhaps rightfully, argue that Apple should include more than 5 GB of iCloud storage for backups, user data, etc. That could be considered part of the product while it still competes in a different market with Dropbox and similar services.