Apple thought more people would buy the 5c. Lower that price analysts screamed. It backfired. People overwhelmingly bought the 5S. There's a lot on here that don't seem to understand Apple's market. They are, for the most part, high end. Whether they're getting the X because of looks, design, tech, or whatever. Apple dressed up the iphone 6 and calls it an iphone 8 but the market knows better.
No one really bought the 5C because it looked crap and wasn't that much cheaper than the 5S when you considered the difference in what you got. Add to that the fact that neither of them was uber expensive and its pretty easy to see why it flopped.
That's not to say there aren't those out there focused on price. That's who the 8 is for. You can mention OLED to these people and they just shrug at you. 4K? Pfft. A11 processor? who cares..just tell me the price? That's not to say that all who buy the 8 don't appreciate specs. Just as not all who buy the X will either and instead only care about how it looks.
So why isn't the 8 flying off the shelves like every single iPhone up until now? Pretty much everyone who owns an iPhone from the past 4 years knows that apple have released 2 iPhones. One that looks like top end android handsets with a small bezel and another that is like their current phone that probably works fine still.
I know I only care about specs and latest tech. I want the X because of its screen (primarily) and front camera tech. This stuff doesn't mean much to many I know. There's many talking about how ugly the notch is. Pfft..I couldn't care less about it. It's pricier, but the resale is up as well. It's a wash and immaterial to me. If you're living paycheck to paycheck, and are already struggling in debt, I can understand being priced out.
£1000 is a lot of money to all but the highest earners. The massive majority of apples customer base in not in that bracket. Apple will have assumed that most people will be going for the cheaper 8 and I think thats not wrong. The difference is that they have priced both handsets out of the reach of a lot of people. Unless you really love having the latest tech, all those iPhone 6S and 7 users won't be feeling the need to upgrade at these price points.