You’re not wrong, but Apple is playing a different game. Android is a nonstarter for me; I’m not giving Google my data - hell, I run a network-wide ad blocker and VPN on my home server (I did mention up thread I’m not a normal user 🤣).
Now my kid is too young for a phone, but when he’s not, I’m absolutely getting him the cheapest iPhone because of the above concerns about Google. And if my retired dad asks me about a phone - well, he has an iMac and an iPad, I’m going to have to do the tech support on his phone - I’m going to tell him to get this. I don’t know Android, don’t want to learn it, and the phone will integrate spectacularly with his existing computing devices.
And I think that’s the market Apple’s going for here. Make it just cheap “enough” that parents don’t go: “oh that’s too much - just get the kid/elderly relative an Android.” Or “I have a MacBook Air but that iPhone is just too expensive”. Those people aren’t comparing tech specs, they just want a device that works with what they have.