They’re targeting India. That’s the next emerging market for Apple, and a $400 iPhone is a lot more affordable than the rest of the lineup. They’ll still sell a decent bunch in the US, but we’re honestly in the peripheral vision for this model.
This graph shows the market share of mobile operating systems in India based on over 10 billion monthly page views.
$400 is still too expensive for India. Its one of the most price sensitive mobile phone markets in the world and it's flooded with cheap Chinese android phones. Many companies make cheap phones specifically for the Indian Market (priced at sub $200 and even sub $100 in some cases) and these phones don't ever get sold outside of India.
Ahh the good old days, when you could get new newest phones for next to nothing by signing a 2 year contract. I never understood the people that complained about the contracts, how often do you really change carriers?
I went from the 4 to 4S to 5 to 5s to 6 to 8 to XR. Early on it was pretty much worth it to upgrade based on the resale value, buying out the remainder of the contract and signing on another 3 year contract here in Canada. I would basically just be paying the $199 u front fee and the resale would cover the cost of buying out the contract. The numbers made sense.
Now, I plan to keep my XR for 4+ years. The upgrades have gotten so incremental it is crazy to buy a new phone yearly. I will probably get a new battery after 2 years.