That isn't an issue unique to smartphones, let alone Apple. That was my point.

They don't have the money, people are spending a rather significant part of their income over a phone.

Love my smartphone it's by far the best electronic invention of the last 50+ years, wish we had them in the 90s/2000s because I'd have so many more photos/videos of loved ones and friends.

So what? If they see enough value in it. Less money they can spend on tobacco, alcohol and tourism

And that "phone" can replace dozens of other devices: https://www.geckoandfly.com/13143/50-things-smartphone-replaced-will-replace-future/

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.

User preferences don't make iphones overpriced. Lack of price sensitivity creates that. 

Where is the lack of price sensivity when most consumers don't buy iPhones or "flagship" android phones but buy cheaper phones instead?

If you didn't have it, you'd probably just have a camera for events with friends and family.