It is coupled. The innovation is dwindling while Apple raises prices. So people will be more reluctant to switch, because 1000 dollars or north is a huge amount of money in any country, not something you could spend in a blink of eyes.
Apple has a lot of opportunities to innovate outside of smartphones though. They can be a luxury version of Nintendo, innovating on the front of HCI, not repeating 'Thinner, Faster and Pricier' recipe every year.
People are already switching slower, and it is not because of the price (at least not in isolation.. the end of subsidized phones with phone plans did create a sticker shock across the board). Phones are now so powerful, especially iphones, that people have been holding onto them longer and longer for many years now. It is in response to that drop in sales that Apple had to raise revenue per sale or face a drop in overall revenues. Of course, they're postponing the inevitable, but in the meantime over the past few years Apple stockholders have benefited, and customers kept paying up.
Apple has a smash-hit already in the Watch, which is an amazing technological achievement and a sales success. But nothing they can do measures up against the explosive growth of smartphones, so all their innovation will be overlooked in any case. If the complaint is that smart watches are too small of a product for Apple (not what I'm saying, but a lot of eggheads out there) then "a luxury version of nintendo" won't sell nearly well enough to matter at all.
Apple has a lot of opportunities to innovate outside of smartphones though. They can be a luxury version of Nintendo, innovating on the front of HCI, not repeating 'Thinner, Faster and Pricier' recipe every year.