Re: NO! It doesn't make sense. It would ruin Apple!
*lights joss stick, starts whalesong*
Apple has been firmly positioned as an aspirational brand for well over a decade. It differentiates itself by only selling the finest, most polished, most slickly designed shiny-shiny in the business. Owning an iProduct shows you can afford an iProduct, and a lot of people like that.
Producing a cheapo iPhone might provide a profit bump in the short-term, but would harm the brand by eroding prestige and undermining the whole reason that Apple is, well, Apple. I think that would translate into a loss in the long-term, and transform Apple into just another manufacturer of consumer electronics.
As a parallel, look how Burberry screwed its brand by selling cut-price tat to chavs - rolling in cash for a few years, then they bombed out and nearly folded after the fickle chavs moved on to other things.
[Yeah, I get that some people - and perhaps the majority of reg readers - don't but into this schtick, but millions of
bozos others do. A visit to any Apple Store shows you that.]