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Notes -
Don't forget that popularity within a group is itself a source of value, otherwise nobody would ever spend any money on it, so it's entirely consistent for a rational individual to pay more for a functionally inferior but socially superior (for their social environment) device if the sum of both effects end up positive. iPhones aren't massively inferior to android devices, they're close enough that the functional difference can be outweighed by the social component without too much pressure. So I would consider this comparable to the BLM supporters: there is a negative effect but the actual effect on the individual is small enough to be outweighed by social forces.
Now, I don't believe that all or even more iPhone users explicitly believe that they're inferior but use them anyway because they're cool. That's not how signalling usually works, usually there's some element of cognitive bias (halo effect?) going on such that individuals rationalize the behavior as being actually superior in all aspects. Even in cases where two products have genuine tradeoffs where one is good at certain things while the other product is good at different things, rabid fans will incorrectly attribute all good things to their thing and all bad things to the other thing. Or in some cases dismiss the faults of their thing as unimportant while the superior thing is what actually matters.
I don't think people are perfectly rational, or perfectly irrational, but instead are some mix of both. If tides somehow magically shift to make Androids cool and iPhones uncool, without any of their functional qualities actually changing I expect more than half of existing iPhone users would eventually switch to Android, and simultaneously convince themselves that Android is superior. It would take some time, as habits and built-in biases can be slow and stubborn, but I expect it would happen. And others would stick to iPhone devices because they genuine prefer them (and others genuinely prefer iPhones but would switch anyway out of conformity).
I guess the way I'm modeling it is to assume that everyone is mentally doing a weighted sum on all the evidence in favor of each side, and coolness increases the weight people place on evidence in favor of the cool side. So if one side is massively superior according to the evidence, people will side with it regardless, but if there's a small change then enough coolness on the other side will outweigh it, and the smaller the difference in evidence is, the smaller the coolness needs to be to make up the difference. But all of these calculations are done implicitly and in the end the person mostly just ends up concluding that one side is "better" without a full rational understanding of why they believe that.
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