I find both viewpoints laughable: That Google thinks it has any shade to throw at Apple over privacy, and that Apple doesn't think it has become a purveyor of luxury goods.
Words mean things and "luxury goods" are from brands like Hermes, Louis Vuitton, Chanel, Gucci, Rolex, and Ferrari. Scarcity is an actual strategy for those companies. And if you actually consider the total cost of ownership rather than the upfront price, Apple products will either be equivalent or even cheaper than the competition.
Pichai and Zuckerberg have both tried this deflection now, and it just isn't a very good line of attack for the above reason. Apple products are too ubiquitous that everyone intuitively understands it's nonsense.
it's reasonable to argue that apple isn't a luxury brand ("upmarket" maybe), but citing global sales here isn't very compelling. for instance, 1 device per person would be less than 20% of the world's population, and probably heavily skewed to the richest 20%, so it's hard to accept that on its face.
global median income is on the order of $1,000/year, so most people around the world consider apple a luxury brand, out of reach of the common person.
i'd suggest refining your argument, rather than essentially resting on your perception of "everyone's intuitive understanding".
The premium market is almost all of the remaining 10-20%. Premium should (ideally, but not always in practice) mean that nothing about the product is compromised or half-assed, while still costing not-insane amounts of money compared to the mass market alternatives. A consumer pays a premium price because they like the thing and/or they like being able to assume that it's premium quality even with respect to things they don't know enough to care about. Premium products tend to have fatter margins and lower volume than mass market products, but generally have the greatest success if they can justify themselves to premium consumers. Competitive advantage within a premium market is often value, ironically- best bang for the buck overall, there's just an assumed higher cost of entry vs mass market.
The luxury market is exactly as Despegar wrote. Tiny companies selling very small quantities of tremendously expensive baubles. Value is almost meaningless here. It's the opposite of mass market- it's the other extreme of trying to maximize (margin * volume).
I think the three tiers of mass market/premium/luxury represent local maxima that companies naturally gravitate towards by applied market forces, with perhaps a global maximum somewhere in the premium range. These sweet spots represent healthy places for businesses to be, for the companies, their customers, and their shareholders.
For example, the auto industry: Toyota and VW are mass market, Lexus and Audi are premium, and Bugatti and Ferrari are luxury.
Steak places: Sizzler and Black Angus are mass market, Ruth's Chris and Flemings are premium, and some place in Hong Kong that doesn't advertise or even have a name and that I will sadly never learn about or be invited to is luxury.
All of which is a very long-winded way for me to say that yep, 1.4bil devices is definitely not luxury. Mostly premium (in the higher-cost-of-entry-but-better-long-term-value sense) but still a huge number. Vertu was luxury, and they completely sucked on top of that.