I think its evidently apparent at this point in time that Apple is not interested in making a cheap, low-end phone. They're not waging in a marketshare war. And thats worked perfectly fine for them thus far. They command a miniscule share of the PC market, yet make the most money. They command a 15-20% share of smartphones, yet make 70% of the industry profits.
Thats Apples strategy. It always has been, and its seems to work very well. Apple wants to maintain a brand of prestige, flooding the market so that EVERYONE can afford one, it loses that allure and prestige. If everyone could afford a Mercedes, they lose part of their brand allure, they just become another Toyota (which is exactly why Toyota splits their premium and low ends into two separate brands and entities).
Apple may be a stubborn company, but that stubbornness is exactly what got them where they are. If they constantly listened to conventional wisdom, they would have never entered retail, smartphones would still be rocking keyboards, and they would have made a cheap crappy netbook instead of the iPad. Before Steve came back and the company DID listen to conventional wisdom, that almost KILLED them. They started the Mac clone program due to the noise about Apple needing to license Mac OS to topple Windows. It didn't do that at all, and ended up hurting Apple almost into death.
So I think its in Apples (and their shareholders) best interest to not listen to all the noise from hedge funds who have NO clue how to create products.