The interesting thing comes at the bottom; "In such a huge market, even 7.5% market share, he noted, is worth billions." So. 7.5% market share is worth billion

The interesting thing comes at the bottom; "In such a huge market, even 7.5% market share, he noted, is worth billions." So. 7.5% market share is worth billions in revenue to Apple, they make healthy profit on the iPhone. They know it's desirable. The simple question is, why would Apple try and price point compete and sacrifice the one thing that makes them stand out from the whole host of other, cheaper devices? There was an interesting report from a while back about consumer purchasing in relation to knock off products in China, and it's an aspirational aspect of consumer purchasing. There's a whole host of people who get the closest thing to the 'the' item they want, be it a fake or a very similar item, and then they'll bank until the can afford it. This is why whilst there's a huge amount of goods counterfeiting it in China they also have one of the largest amounts of luxury goods growth for any economy. Apple is in a safe position by doing what they're doing, it's not like Ferrari or Louis Vuitton have suddenly panicked and tried dropping their prices for an increase in market share. Note, there's a massive divide between the poor, the reasonable and the wealthy and I'm not an economist so I'm not even going to get into that quagmire.