You're not wrong about the absurdity of this plot, but I'll try my best to make sense of it.
Tim created Iris. He claims it's a spyware he downloaded from a hacker site to spy on his girlfriend; whether he's lying or not, he obviously tinkered with it. In essence, it's a groundbreaking AI software that learns through electrical impulses. Tim (who studied computer science, physics and medicine) and Dr. Carlo want to utilize it to control spinal implants and cure the handicapped, but Tim also put Iris on Anna's phone as a Siri-like* app to mess with her for dumping him in high school.
So being a new and sophisticated piece of AI software might explain some of the things Iris does, though not all. It kills 2 people with exploding smartphones, for one, which doesn't make much sense. Sadly, the only explanation for Iris's more improbable powers that's implied in the film is supernatural: Iris is possessed with the ghost of Tim's late girlfriend Liesbeth. This is why it keeps playing creepy messages from her throughout the film (including her last, new message before killing Tim).
*[Hopefully not stating the obvious here, but the Iris software in the film is a parody of Siri, which is Iris spelled backwards.]