OTOH, the Apple flagship store in Chicago is on Michigan Avenue; in New York, 5th Avenue; and in Paris, right next to the Louvre.

Apple is positioning itself as the luxury brand you can afford.

All of those brands have cheaper products too.

Yes, event the Louvre has a giftshop.

The Apple store in Zurich is at Bahnhofstrasse. From http://en.wikipedia.org/wiki/Bahnhofstrasse

"Bahnhofstrasse is Zurich's main downtown street and one of the world's most expensive and exclusive shopping avenues. In 2011, a study named the Bahnhofstrasse the most expensive street for retail property in Europe, and the third most expensive worldwide.[1]"

It very much looks as if they are positioning themselves along those super luxury brands.

Perhaps, though the first Apple store in the Zurich area was in a mall which few would call glamorous: https://www.apple.com/chde/retail/glattzentrum/

H & M is also on the Bahnhofstrasse... This road has lost its edge :-(

I think you are misunderstanding how branding & pricing works.

Chanel perfume can be bought for $100; a Chanel suit for $2000.

A new Ferrari will cost $300,000; a Ferrari T-shirt is $75.

An $850 iPhone fits nicely into this, especially as it it has a similar level of design quality.