$400 to $600+ is at minimum a 50% increase in price.

You're also ignoring that many people want the smaller form factor.

Also, frankly you're dismissing the reality of how people actually interact with devices. My mother in law wouldn't consider buying a new iPhone at the existing price points that have been available. When I upgraded to a 5S, (so ~2 1/2 years ago) she started using my old iPhone 4. After a while, she bought a hugely over-sized Android phone, thinking that the experience would be largely the same (e.g. a smartphone, compared to the feature phones she'd used before).

She used it for maybe a month, and then went back to the iPhone 4 in spite of it being older and slower, with a much smaller screen. She used it until the end of last year when she upgraded to my wife's 5S.

She is not technical at all. She has pretty basic needs - a browser, calls, the Line app. She has tried the "Android experience" and is adamant that she doesn't want to try it again, the experience was so abysmal, even compared to 2 generation old iPhone.

I am confident it would be easier to convince her to spend the ~$400 on an iPhone SE than it would be to convince her to try Android again, even at 1/2 or 1/3 the price.