Apple is following the same path they have done since the original iPhone. They have always had models at different price points.
They seem to be slowly losing market share, though.
May be better UX design would solve that. Any controls should be at the bottom part of the screen. But iOS is not there anyway.
I got a Note 1 phablet after my iPhone 4 as an experiment. It was an audacious device where Apple had gotten stagnant. While the galaxy note 1 was a premature priduct, the phablet form factor was a constant constant piece, and it nearly ended the use of my iPad. My android phablet remains in my life/because Apple missed the boat on screen sizes and is playing catchup.
The phablet phenomenon is real and a calculated tradeoff.
Phablets have cut into other markets and for most people globally if a movie is the Mir primary computing device, the phablet is more appealing. In the case where summertime doesn't use a phone much, they often have a tablet, laptop, etc.
Not having a headphone jack remains a pain, Bluetooth ear buds need to be at 20 hrs of battery life to get wider adoption.
Now... WTF.
MacBook Air was released in 2008.
Mac Mini was released in 2010.
The Mac Pro didn’t overlap wih the iMac Pro as it does now.
The iphone overlapping 7,8,Xs,Xr.
iPad Pro 10.5 overlap with regular iPad.
Steve Jobs was only alive during the early days of the iPhone where Apple was focused on implementing basic features like 3G. We are in the era where what you call gimmicky features are all that is left.
And customers are asking for bigger phones and more phones at different price points. This myth that Steve Jobs never listened to customers is just that a myth.