The floor price keeps going down though. Maybe they don't want a $125 phone, but perhaps they want a $250 (new, not refurb) phone.

The recent drastic redesign also lowers the appeal of the older iPhone models.

A $139 Nokia 2.2 looks like a better phone than the refurb iPhone 7 does, just because they designed it to imitate the iPhone X's curved corners and camera notch.

Removable battery and headphone jacks aside, it's probably a worse phone than the iPhone 7 is. But it doesn't look like a worse phone.

When Apple's cheaper used phones catch up to the modern phone design style, I think they'll be more competitive. But that's still years away, and who knows what new phones will look like then.

Apple dipped their toes into the lower end of the market with the 5C and the fact that they made it look drastically different suggests that Apple agrees with you.

The 5C was never a lower end phone. It was the typical year old phone sold for $100 less. They just put a less expensive case on it.

Isn't that like saying BMW needs to address the economy car market?

Assuming they had fully saturated their current market and wanted to grow. Not the best comparison in my mind.

Apple wants to grow profits and you don't do that selling low margin devices to people that don't spend a lot of money on apps and other Apple products and services.

Nobody is making any money selling to the low end of the market.

Apple sells $299 non-refurb phones, which is pretty close to that price point. Getting down to $250 probably isn't hard with various discounts offered by carriers.