Just to clarify things, Apple has a bigger turnover than Google (Android), but Google makes considerably more profit (especially relative to turnover), something like $8bn more. When 2011's results are posted, Google will have closed the gap.
Apple use premium pricing models because it is perceived as a premium product. They are also pioneers, which doesn't harm the 'cool factor'. I would agree with the others that a cheapo version would devalue the brand. You see it with clothing brands regularly, Burberry being the all time classic, which took years to reverse! Shareholders will always be pushing to make more money though, so its a hard thing to balance...