The reason is nobody in their right mind would buy a XS for $900 when they can get an 11 Pro for $1000. So you’re wasting time and money in inventory management, backend, systems, logistics, and of course worse margins. And even more importantly, you’re confusing the customer.
It is in the customer’s best interest to have one option of each type. And as few options as possible.
Otherwise you’ve seen the mess companies like Samsung have put themselves in.
The fewer the options, the less confused the customer.
More options make sense when they add value. A $100 buck saving is a special date’s worth of money for the audience that the Pro iPhone caters to, they will only get confused and blame Apple for so many options. Ultimately not buying any iPhone at all.
XR is offered because it is for the common masses. Those whose entire week’s ration might be USD 100. They might not buy an 11 because they can’t afford it. USD 600 might be a big deal there. When you’re anyway spending so much more frivolous money around the USD 1000 mark, USD 100 makes no difference one way or the other.
If Mercedes was to sell a 4 year old brand new model for 45k compared to 50k for the latest model, would you buy it?
But if you could get a second hand budget car for 8k instead of 10k for brand new, you might consider it if you are short on cash.
That’s how the low end market works.