Apple is a huge technology corporation and the primary objective of every corporations is to earn profits and to serve the shareholders. Steve Jobs’ obsession for high quality products that came at a premium resulted in high margins. Apple, unlike Samsung that bases its earning on volume, combines branding with creating demand through its innovative products, which makes buyers give more weightage to aspects like the need to belong to the hip crowd, aesthetics of the device etc than to functional needs and charges a premium for it.
Apple is not looking to compete in a market that is too cluttered and has too much competition today with now the Chinese entering the fray, cutting corners, attempting to grab a share of the pie.
Budget electronics are a liability for the manufacturer. Entering a price war is a big gamble as cheap products leave little margin. As Apple comes out with only a couple devices a year, cheaper devices mean less budget for marketing, fir research and development – two areas Apple likes to spend more on. After paying for the parts, labor etc Apple, in that case, will barely be making any profit at all. When customers call within the warranty period with complaints or tech support, or worse, call in for a repair or replacement of a defective product, there goes that margin.
Another reason why they can’t imagine producing cheap products is the iOS. Apple will never opt for cheap hardware which cannot run the latest version of iOS, as they put a lot of their focus and work into prodcuing quality products that don’t lag and crash. Apple gives great value to user experience which is their paramount concern while designing products for the market.
Apple is able to provide exemplary service by keeping their products priced high and providing high value in return, in terms of reliability, features, durability, and post-sale support. If they were to offer truly budget phones, it would reflect poorly on their brand and offer users a sub-par experience.