Why apple would produce loss leader iphone

Listened to vergecast and wanted to point out alternative theory on reasoning for iphone tiers (kind of obvious so I apologize if they or somebody on the forums already pointed this out)

Apple's could be counting on making up lost revenue of below margin iphone with anticipated app store and itunes revenue. A cheap iphone might also accomplish goal of slowing growth of Android in emerging markets. In my dreams, they instead use iphone revenue to produce a loss leader 30 inch retina Thunderbolt display.