It hasn't helped that Apple has been awkwardly late to the game in all the major platform sizes as well. A year late with a small tablet (price corrected now so it isn't cannibalizing profits), and still no larger format phone and no phablet format...which both sell like hotcakes in the smartphone market.

It'd be like if Honda refused to make a mid-sized sedan and minivan and piled all of their efforts into the Civic.

Sell like Hotcakes? They sell reasonably well in one country - South Korea. In the rest of the world they’re at 7%.

I would argue that most android phones sold have larger than iPhone screens and most phones sold globally are android phones.

I was referencing “Phablets” specifically but if you want to talk larger in general:

Just over half (55%) have larger screens, so 45% have the same or smaller screens. Given that a large number of Android phones are effectively “feature phones”, the “most phones are android” is meaningless.

Again, keep moving goal posts. The upgrade path from a crappy Android phone is likely to be to a better Android phone in most of the world where Android is absolutely dominant. As those areas move up the socioeconomic ladders, Apple has to fight an uphill battle to enter those markets and then gain market share, instead of the consumers bringing the brand up with them.

Average consumers don't necessarily understand that cheap android phones are shit because they're cheap, why would you assume they will just buy another android phone?

Because if that's all that's available in their home market that's what they'll buy. When a line of products becomes entrenched, trying to enter such a market is tough. I'm not even talking about developing world markets. The iPhone sells poorly in South Korea for example and it's not because Koreans like Samsung (most people in SK don't like Samsung).

iPhones should be an easy sell with an appearance oriented audience willing to spend large sums of disposable income on imported expensive goods almost to the point of insanity and bankruptcy, yet iPhones are so rare you can spend days in the heart of Seoul and count the iPhones you see on one hand.

You ask the typical South Korean why they aren't snatching up iPhones? It's the arguments I've already presented: too small, not enough features, etc. They feel like they're buying a phone from 2 or 3 generations ago, not a modern forward looking device.