Pretty much this. The Apple Watch edition was a vanity product made because Jony Ive wanted one. It got canceled pretty fast and Apple went back to its comfort zone, which is making “affordable premium” computerish gadgets.
Affordable premium means that it costs some more but not hugely more, and for that extra cash you get a high end product with a fuckton of brand cachet.
The Iphone 8 is a high end phone, for the extra money you get the fastest CPU, one of the best cameras you can get in a phone, one of the best screens in a phone, etc. The Iphone X is just an Iphone with the “high end” value dialed to 11 - a far more expensive screen, dual OIS cameras, and loads of fancy facial recognition enabling hardware. Naturally it’s going to cost more than the next step down.
Apple loves them their high profit margins, but (with the exception of the edition watch) they always keep those margins pretty consistently around 35-40%. Add in their huge economies of scale, and the price premium over an equivalent device from another company (rather often there is no fully equivalent device) isn’t usually all that much.