Originally Posted by mstone
Just because the phones are getting older from a design perspective, doesn't mean they are continually getting cheaper. At some point they may even become more expensive as the components become completely outdated.
OTOH, the assembly lines, test jigs, and skillset training are totally paid for, and the profit actually increases. it balances out.
The 4s form factor can be effectively internally upgraded with components 'upstream' (a new processor, new memory etc), may temporarly increase the cost of a component supplier or subcomponent on the apple assembly line, but the footprint costs of final assembly and testing remain at zero, with only the component cost and the labor costs (again lower per quality checked assembled unit).
The key thing is factory footprint costs, and any quality bumps.... in theory the first working iPhone costs 4Billion or so to make, and sells for 625, the next 400million phones cost 180/unit, and sell for 625. Somewhere near 10Million mark, the 'manufacturing CapEx' is recovered, and it's pretty much pure profit after that.
building out a new size, new materials, new anything that requires a reprogramming of the automated assembly requires a new assembly line to be built (Apple doesn't retool until it retires)...
It makes little sense to retire both the 4 and the 4s. for a new high nd (5s), and new low end (??).