Apple is not selling caviar against cheese and crackers. They’re selling better-tasting cheese and crackers, and all you have to do is come into their store and taste some to believe for yourself.
Excellent point by John Gruber, explaining some part of the success of Apple in the consumer market. Where some thought ten years ago that Apple Stores would fail, because "people were happy with simple cheese and crackers and did not need caviar".
When you look at the price of an entry iPad and the entry price of a MacBook Air, you can see that very few other companies managed to compete efficiently with Apple. Not luxury products, but just better products. Some people prefer to pay an extra to get something better, some are happy with standard crackers. I am OK with both.