Apple doesn't do cheap.
You can just see the process now.
1. Reduce iPhone specs by half to reduce price by half.
2. Compare against rivals.
3. Worry about reviews and then increase the specs.
4. Increase the price to reflect upgraded specs.
5. Increase specs to make use of components and design elements from last years phone.
6. Increase price to reflect increased specs.
Finished. Oh it's only £50 cheaper than this years high end phone, oops.