"Pictures of candy-colored entry-level iPhones with rounded corners have started circulating. Many have branded them hideous, crude atrocities. They need to be. Apple is facing a unique dilemma: Because of the stellar success of the iOS app universe, the entry-level iPhone has to have nearly the same specs as the flagship iPhone. The display has to be large. The processing power has to be substantial. Apple cannot afford to fragment the iPhone device base, particularly since it has spent years mocking Android vendors mercilessly for doing just that. Still, the budget iPhones have to be something that affluent and aspirational consumers despise."
Is this price discrimination? Some textbooks provide the example of French third class train carriages that, they say, used to have the roof taken off to make sure that they were inferior to the second class.