Why is A not correct? by POE I eliminated BDE and was struck between A and C but favoured A over C....

The argument's boldface portion points out that:

Option A:- Incorrect
Well, the first bold face portion isn't a reason that is being provided but an observation or a fact that is quite known to the customers. The second boldface portion isn't an explanation enough to counter that conclusion because the manufacturer can go ahead to make such phones even with the knowledge of not having enough customers, so this option isn't playing a significant role.

Option B:- Incorrect
The argument hasn't tried in anyway to disfavour the first boldface portion instead it sees it as observation which lead to the argument itself. The second boldface portion isn't what the argument wants to achieve. but it is a mere conclusion of what might be achieved based on the manufacturing cost of the phone.

Option C:- correct
This first bold portion is an observation of the cause of the most fault in customers phone and the argument doesn't dispute this. A solution has been provided to rectify this common fault, but this will inflate the price of the new model phone which leads us to the second bold face which happens to be the conclusion and is not supported by the first.

Option D:- Incorrect
This option is quite close because it agrees that the first boldface is an observation that is not disputed by the argument but the second is not an explanation the argument favours because it isn't what the argument sets to achieve.

Option E:- Incorrect
The boldface isn't reason provided to support the conclusion.