Apple has never followed your premise. They don't make a low end desktop, they don't make a low end notebook. They never have, and as of right now they've stated they're not interested in that market, so to my mind it doesn't make any sense that they would go against their established trend with a phone. Besides, the iPhone is a premium phone, and thus has little real competition (some high end Blackberrys, Android, and Win Mo handsets, but thats essentially just three names to compete with). If Apple jumps into the low end market it has to compete with many very well established players (LG, Samsung, Motorola, the list goes on and on). The money required to adequately compete in that market wouldn't be worth it - besides cheap products would just dilute the "premium" premise of the brand.