The price tag is dictated based on the image. Originally the price tag was a symbol of quality, but that has changed over the last few years because of the problems with quality (breaking backs of iPhones, laptops that burn your lap, bad iPad screens, and faulty software galore). Now image is everything for Apple and they are fighting tooth and nail to defend that image... regardless of the facts and truth.
A good example is the malware scares on the OSX. For a decade, Apple had built an image for its self, that malware and virus is something Apple machines dont have. They used it in their marketing. Now anyone in the industry knows that the reason that Apple OSX did not have malware and virus was because no one used the operating system and computers. But with the help of the iPhone, Macs became popular in certain parts of the world. This meant that Mac OSX came in on the radar of hackers and suddenly OSX became a target. Now everyone in the industry knew that security was never a strong Apple point, and the first malware attacks showed us this and damaged their image. It took them weeks to admit there was a problem... because Macs dont get viruses right? and then more weeks to fix it.. and that was just one attack. And now days, they have removed the "Macs dont get virus's" marketing from their material.. reality hit home it seems.. and they have with the new version gone over to a draconian way of "protecting" their users.. basically making the OS even more pointless and less user friendly when it comes to 3rd party programs.
Or take a look at the iPhone 4S. When it came out SIRI was the "WOW innovation" part, despite voice recognition being around for years. Fact is.. SIRI sucks and is basically useless other than in a minor gadget way. Even one of the founders of Apple admits this and all tests against rivals show how bad SIRI is. Apple knew this, but still continued to market it as innovation.. because their image dictated that every product they came out with had to be "innovative" and perfect. Problem was the iPhone 4S was a minor upgrade to the iPhone 4, which in turn was an outdated smart phone, but the image pushed sales.
Or take the iPad 3. Super screen yes, but in reality the resolution is pretty useless in such a small format and considering the heating problems that it created (the new ipad is damn hot to hold in your hand), not to mention the increase in size of apps and movies full HD means.. but not an increase in storage capacity.. simply not worth the upgrade. What is the use of an iPad 3 16 GB if your apps double in space size and you cant even have one full HD movie on the damn thing? But it did not stop Apple from marketing it as innovation and revolutionary. Most human beings cant see any difference in the iPad2 screen and iPad3 screen in day to day use.
I would say the next iPhone needs to set a new industry standard on many fronts for Apple to maintain the illusion they have built over the years. If it is another iPhone 4s or even iPhone 4.. then Apple could be in serious trouble. Mac sales are falling, iPad sales are flattening out and there is far more credible competition and iPod sales are taking a nose diving. If for example, the new iPhone 5 does NOT have the compatible 3G chip for the China Telecom...... then well, Apple will never be more than a bit player in China. We already know how the new iPhone 5 OS looks like, and it is nothing but more catch up to Windows Phone and Android, with a healthy bit of "borrowing" of idea's... so the technology has to be spectacular... better than the Samsung S3, HTC One and LG L7 and so on.... and that is going to be damn hard.
But we shall see.. only 2 weeks left or so before we know.