"Listen. Let's put one mid tier phone on the market. Make it expensive but not necessarily any better than its predecessor. Then, we also release a phone which is actually an improvement. Our flagship, if you will. The trick is in making the mid tier marginally cheaper than the flagship. This will make the step to the flagship a lot smaller and as the mid tier is basically its predecessor with a few tweaks and a new housing, the average Joe will not even complain. We are getting rid of the old iPhone fives, improving sales for the more expensive variant and it doesn't cost us a thing!"
Actually I've read this (in a more elaborate version) in either Priceless or Influence (maybe even some hints in Scientific Advertising). Which are two very good reads if you are in anything related to sales, money or almost anything else. It's something I've applied many times and works wonders.
"Listen. Let's put one mid tier phone on the market. Make it expensive but not necessarily any better than its predecessor. Then, we also release a phone which is actually an improvement. Our flagship, if you will. The trick is in making the mid tier marginally cheaper than the flagship. This will make the step to the flagship a lot smaller and as the mid tier is basically its predecessor with a few tweaks and a new housing, the average Joe will not even complain. We are getting rid of the old iPhone fives, improving sales for the more expensive variant and it doesn't cost us a thing!"