Always add 100$ to what you think the reasonable price would be. Apple never made products just because there is a market for it. There is a market for a 10,000$ car, that doesn't mean that Porsche is going to make one. I do think they will keep it, but at 299$.
Also, Apple always plays the long game. Apple tends to always do what is generally presumed that they should do, but much later and at a higher price point that most would guess, but with a great product that sometimes fails because that particular market doesn't want a good, medium-to-high-priced product. See Homepod. It's clear that Apple would rather fail with a good product, than succeed with a poor product (although some may disagree what constitutes a "good" product...). It was clear years ago that Apple would need a cheaper phone to reach markets such as India, but rather than rushing out a cheap no-good phone, they are edging their way to cheaper phones over time, in a way that allows a product that is a solid option in the lower-cost market, while being irrelevant to the high-end market so they don't cannibalize. Which is why the new iPhone SE will have zero "first time in an iPhone" features.
There may be an argument that Apple is quickly increasing their services revenue, which makes them less dependent on the direct hardware margins, since they will make it up in services. However, if they do eventually change their strategy and focus on higher number of services users rather than hardware margins, it will happen late, because Apple is conservative. Also, I suspect the highest value in services comes from users of high-cost phones, not users of low-cost phones. Apple has a very strong demographic advantage, and they don't need to attract low-value customers.
