Premium products are more expensive than mass market products, typically with higher margins, but at the same time they tend to have greater value for the price than mass market products, provided the price isn't out of reach. Luxury products are much more exotic than premium, with much lower sales numbers, and their price is often almost entirely based on things like scarcity, manually intensive assembly, use of precious metals, etc.
A well-designed premium product should be as good or better than the equivalent mass market product in terms of getting what you pay for, but in the luxury world there's really no concept of value. It's expensive because it has to be and because the vendor wants it to be, but the value proposition is often nonexistent.
Rolls Royce is a luxury company. Rolex is a luxury company. Apple sells a product that's in the pocket of every other snot-nosed preteen.
However, they charge a larger-than-normal markup, so people feel like it's luxurious.
EDIT: There seems to be some misunderstandings of what a "luxury" good is. Something isn't luxurious just because it is subjectively a little bit better than the competition. Bosch makes the best dishwashers but they are not a luxury brand. Similarly, the Golf GTI is an absolutely incredible $30K car, but that does not make it luxurious.
A Rolls Royce is a luxury car because it is full of extravagance and opulence. There is absolutely no concern with keeping costs down, and there is no expense spared to make the car as comfortable and luxurious as possible. It also fits the economic definition[1] where spending on luxury cars increases with income. The richer you are, the more money you spend on luxury cars. This isn't true of Apple products because it is a mass produced, mass market good. A billionaire can't buy a better iPhone. That's the opposite of what it means to be a luxury, exclusive brand.
Of course, unlike Apple, Rolex makes products that last decades. So older, less collectible models become affordable to people. But the fact that the "mass market" is willing to fight over the heavily used, least desirable of all Rolexes proves its exclusivity and "luxury".
This is fundamentally true of all luxury goods, so this distinction is not meaningful. Which is why it is commonly used as a marketing tool, you can create this distinction at any level you want, to make your customers feel exclusive.
Sure, apple plays at the lower-price-broader-market end of this than say, McClaren automotive, but it's the same game.
Speaking personally, I have zero interest in brand except as a marque of quality. But for those who are optimizing for quality over price, Apple is a choice that rarely leads to disappointment.
That's a different proposition to most luxury brands, which primarily target aspiration. A Louis Vuitton handbag may not be a higher-quality handbag, but as I understand it, their consumers are buying it for the logo more than the craftsmanship.
> However, they charge a larger-than-normal markup, so people feel like it's luxurious.
This doesn't seem to me to be a complicated "dichotomy" to square/understand where with phone hardware, at least, any markup is sometimes "larger-than-normal". It's very easy to be a phone "luxury" brand when so many phones are sold with thin to no margins. Apple certainly props up their "luxury status"/"luxury image" with much higher margin products in the margins outside of phones, but it is easy to see why the bar for "luxury phone" itself is so low that it can also be a mass produced/mass consumed object.
Seriously? This comes up within the first few comments in just about every single internet thread about Apple I've ever seen.