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areason said:

You need to compare the iphone to it's competition. It is overpriced compared to android devices.

If consumers were price sensitive they could get the same iphone that they have now for a cheaper price, but they aren't. 

Please spare us all these generalizations.

Many consumers prefer the iPhone, many more prefer Android. Both OS have advantages and disadvantages. There are also many overpriced Android devices. There ain't "the iPhone", there are different models in different price categories.