And the iPhone is sufficiently differentiated? How so? Just because it runs iOS?
Otherwise Samsung and other Android manufactures offer very competitive offerings to Apple's flagship offerings.
iPhone SE and older iPhone's are in the lineup because competition is putting pressure on Apple to offer something or else lose that segment entirely.
In my opinion, mainly because of the ecosystem, but also a combination of great support (apple stores), longer software support, excellent build quality, apple silicon etc. When you put all these factors together, you quickly realise that Apple doesn't just sell a smartphone. They sell an experience made possible by their control over hardware, software and services.
This is ultimately the biggest threat to Apple's competitors. Anyone can make a smartphone, but practices like the DMA show that the competition have all but given up on trying to replicate their own ecosystem.
You can try to argue that phones are phones at the end of the day, but the hundreds of millions of iPhones sold every year clearly tell a different story. That for these people, the iPhone does offer something uniquely different and compelling for them. It could be iMessage so they can remain in a chat group, it could be the integration with their Mac (airdrop and iCloud), it could be apps like ivory and overcast, or even something as innocuous as the Apple Card.
The best thing about all this is - the consumer's decision is ultimately theirs and theirs alone, and they don't need to justify it to anyone but themselves, and it doesn't even have to make sense to you.
And the beauty of the iPhone SE, older iPhones or even 2nd-hand iPhones is that while cheaper, they don't require Apple to sacrifice margins (unlike cheaper android phones). The majority of iPhones sold appear to still be their high-end models. The iPhone SE typically uses an older phone design for which Apple has likely already written off the R&D and upfront manufacturing costs of. Even 2nd-hand iPhones continue to make Apple money by way of app revenue, subscriptions, accessories, heck, even Apple Pay.
All because Apple has its own ecosystem that it is capable of effectively monetising, and the competition doesn't.
