Yes and that cycle is bad, in my opinion. I'm looking to buy a smartphone at the moment. I usually spend around EUR 200 on a smartphone, and I've always been very happy with the results. I could spend more if I got something genuinely better in some worthwhile ways, but if not, I prefer to spend my money on other things.
Let's look at what Apple offers to me. I'm not interested in a design from 2012 with a tiny screen (I know the internals are different), so the SE is out, regardless of price. It's barely competitive with phones costing EUR 130. The next iPhone up is the 6S from 2015, which costs EUR 529. I will repeat that - a phone from 2015 costs EUR 529. And this phone has a 4.7 inch display. That EUR 130 phone manages 5 inches and smaller bezels. This is hardly a serious proposition in 2018.
I appreciate that plenty of people are prepared to buy these outdated iPhones for very high prices, and that Apple don't want to make cheaper phones too good, as fewer people would then buy their more expensive models. But they do miss out on market share - a modern iPhone costing EUR 500 and competitive with other phones at that price would be tempting to current Android users such as myself. It's a shame Apple are not interested in winning us back as customers.
PS. It's rumoured that Apple will introduce a new 6.1 inch LCD iPhone for $550-650 this year -
https://www.macrumors.com/2018/04/18/kuo-6-1-inch-iphone-dual-sim-option/ . I will leave you to decide how likely this is to be true, but it seems like the right direction to me.
The dual SIM option would also be a huge step forward - lack of this must cost Apple some serious sales across the world right now. A $100 uplift for a second SIM slot is ridiculous, though. It's a common feature even on cheap Android phones. Our EUR 130 phone above has two SIM slots.