There is not much original in that thinking, there is the concept of disruptive technology. It is always sounds great for a company to stick with the premium product with the high margin. The problem with that is that you leave your rear unprotected.
Companies come in that offer cheap, crappy copies of your product. Now while they are doing that, they get better and better at doing what they do. They also capture a part of the market that you are not interested in. This market also get's more and more sophisticated. Suddenly as it turns out a nice sunny morning, you are not that much different and this other company is starting to offer a product that is as good or better than yours and they are established in their market and you are cornered in a market that has no profit any more. You sell a phone for $1000 dollars, they sell a phone for $50 and there is not much difference in the phones.
Let alone all it takes is a disruption on behalf of the underdog
The only defence is to create a buffer on its rear, but apple might have left it for too long. Much like their founder, he left treatment for too long believing he can handle his condition by "natural" means
Do you suffer painful illumination? -- Isaac Newton, "Optics"