The whole point of the iPhone X is that Apple have been in a bind. Selling so many individual handsets with a huge launch demand has left them hamstrung when launching new features. Not only do they need to ensure new engineering, they need to ensure that engineering for new feature x is at a scale none of their competitors need to match for any single handset model, from day one (even Samsung does not sell so many of any given single model). Their way to solve this is by increasing price to reduce demand to a serviceable level. It’s a high risk strategy they would probably have preferred not to have to take (launching the iPhones 8 and X at the same time goes against Steve Jobs expressed preference for the “one Coke” philosophy). But the problem of introducing new tech at such high volume has left them exposed. They are unable to implement new cutting edge features so effectively but their price proposition and margins are such that they are expected to be out in front.
In truth this may be a one release problem. The key part that has caused this bind is likely to be the introduction of a true edge to edge display. Samsung have ended up dominating the OLED supply market more than Apple expected, competitors have had yield/quality issues and the result is that the display component is no longer a competitive commodity supply choice. At least not for this release cycle.
So yes Apple are expecting reduced demand for iPhone X, while they want to maintain profit, that’s the whole point. They are trying to overcome the challenge of introducing an edge to edge display that can’t be introduced in the volume an iPhone launch typically requires and are using the price/demand curve to solve the problem.