Steve Jobs is dead. Get over it. No one knows what he would have done and he's not here to tell us. As an innovator, he'd probably have moved with the times--and decided they need the cheaper phone to compete. The guy was a brilliant man, but he wasn't infallible. Only God is. And my mother-in-law.
That's where you are wrong. The great thing about Steve was that he didn't move with the times, the times moved with him. If Apple starts down the multiple product route to compete, its the beginning of the end which actually started when Cook and board issued dividend. Apple is starting to follow. It needs to lead again.