Thats up to them, but they are losing big time.
So, you don't think Apple is making nearly enough money and profit? They should try to make much more (if you believe they are actually "losing big time") by also selling at the low(er) end of the market?
maybe I live under a rock but I never saw iphone as a "premium" smartphone. Its not cheap but nothing to show off, even teenagers got them.
It's more about Apple being a premium brand/company and iPhones being a product of that premium brand/company.
A rolex watch is a premium product.
I would put Rolex above the premium brand level and more at the luxury or ultra-luxury level even though I am sure some teenagers have Rolexes too, not that I find that to be a gauge anyway.
I see premium watch brands as more like Omega, TAG Heuer, Longines, Tudor, etc.