In the war with Windows, Apple followed the self defeating tactic of refusing to allow anyone else to make the hardware the OS ran on, and also refusing to contract out manufacturing. The result was that supply was limited. This did allow prices to be kept high, but since lots of people, mainly companies, had decided they needed PCs come what may, it drove them to Windows.
The Windows PCs meanwhile, because there were multiple competing suppliers, fell in price. As this happened, Apple market share fell, and funding for Windows rose, until finally Apple became something like the Louis Vuitton of computing, a tiny, expensive niche provider in a huge market.
At least this time they have not made the mistake of restricting supply and have not tried to keep manufacture in-house. They have also achieved Jobs aim of controlling what software runs on their machines.
However, in the end the dynamic is the same. They are not going to be able to keep a functionality gap. Android is basically free. In the end, you can get a £50 phone in Tesco that may not be as good as the several hundred pound iPhone. But for most people it will do the job, and so they will buy, and Apple in phones will deteriorate into the Louis Vuitton of phones. Tiny market share, very elegant, but not a player in luggage.
You can't have it all ways. Market share matters. And this is a way to lose it. If you want to see the future, look at the Mac. Old hardware, nothing remarkable about the software, and high prices