But the funny thing is that this pricing will backfire and the scarcity of the X will move it into the Veblen zone.

I've wondered about this myself (although I've never heard the term "Veblen zone" before!). $999 is a big jump from $699 but it's not a crazy high jump. If you're paying for it monthly over two years it's $29.17/month vs. $41.67/month, an $12.50/month increase.

Still expensive, but very much an attainable status symbol.

Phones are not conspicuous enough to be a Veblen good. Unless buyers start wearing it on their belt or around their neck.

Which is disproportionately weighted by heavy users. The average user isn't flashing their phone often enough to be conspicuous: https://blog.dscout.com/hs-fs/hubfs/blog_posts/Mobile_Touche...