I don't know that I buy your basic economics theory. Starter prices are a thing to get people in the door and upsell them later. According to [0], the iphone 17 pro has a larger share than the regular 17, although it's more expensive.

And, again, paying for cloud storage doesn't automatically mean that they do it because their local storage is too small for their needs. Apple pushed iCloud as a solution to safely back up your stuff, and I doubt nobody bought into this angle.

[0] https://telemetrydeck.com/survey/apple/iPhone/models/