But isn't the iPad technically the flagship device? Why is the iPhone supposed to get it before the iPad?
No. The iPhone is the flagship device. Even if the iPad is technically more powerful.
A similar instance is that of the MBP vs the iMac. The iMac is more powerful, but the MBP is the more expensive flagship that gets Thunderbolt and Retina screens first. (The Mac Pro is also clearly a flagship device, however I'd put it in a different category.)
I think it's about creating examples of Apple's fantastic engineering, and product placement too. If someone owns an iMac and an MBP, people are more likely to see them using the MBP than the iMac, which is more likely to be left at home. Therefore Apple want to make the MBP as impressive as possible (which comes with the drawback of increased cost). The exact same idea holds for the iPhone vs iPad.
And once people buy an iPhone/MBP, they are far more likely to buy an iPad/iMac if they want a tablet/desktop.
That pretty much defines the 'Product Halo Effect' right there.
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