Exactly. Apple is happy being a niche, because they are still raking in money. Sure, it doesn't hurt if more people start accepting a 1199 computer every 3 years as being part of their budget, but I don't think they are ever really going to have a lot of low end.
The common car analogy applies. MS = Ford, Apple = BMW.
Sure, both will get you places, but Apple/BMW do it with a style and feel that MS just doesn't. And, like it or not, style is important to a lot of people. See: Macbook Air. Really doesn't compare to a lot of machines in its category (no optical, weight isnt that great, 1 USB, no ethernet, etc.) but people are buying the thing, and its receiving a ton of press just because its thin and stylish.