There is a tremendous amount of lack of understanding here. Hopefully I can bring some sanity and critical thinking to this discussion:
The Low Cost iPhone: What You Need To Know
This term, "low-cost iPhone" has been thrown around since basically a month after the launch of the first iPhone. It has persisted as a rumor since around the time of the 3GS. Yet, it has no definition. It has no real meaning. Every person interprets this to mean something different, and thus a total lack of comprehension ensues. Allow me to spell out a few things regarding the "low-cost iPhone"
First of all, there is no such thing as a low cost iPhone. Just as we saw with the iPad mini, there is no such thing as a low cost iPad. To get the cost down, you have to remove hundreds of dollars worth of components......at which point......it is no longer an iPad, or an iPhone.
So, what can this actually mean then? Well, a CONTRACT-FREE iPhone is NOT the same as a LOW COST iPhone. I'm tired of this delusion that buying an iPhone off contract somehow saves you money and equates to the low cost option...NO. All it does it gives you the freedom to STOP using and thus STOP paying for your iPhone...wtf is the point of that? Can anyone tell me? Why on earth would you do that? Yes I can imagine unexpected, extremely rare, niche scenarios in which stopping service to your iPhone is desired. But that is neither here nor there. You buy an iPhone to use it.
So, again, what does it mean to get a "low cost iPhone"? Because I can tell you right now, there is not one living soul that would agree that paying $399 up front for their iPhone, and then an average of $75-$100 a month for service, equates to "low-cost". Not in any way shape or form. You cannot spin that to make any sense.
However, is $99 up front and then the same monthly cost, by comparison, "low-cost"? You bet your sweet behind it is. Every American between the ages of 18 and 45 would see that as the "low-cost" option when the two are compared. Even though in the latter option, you are signing a 2 year contract...you are receiving a carrier subsidy of nearly $500. That is money that you DO NOT have to pay back. You have to pay for monthly service on the device, which is necessary to use it, prepaid or post-paid makes no difference here. You can make the lame argument that off contract there may be cheaper monthly plans, but I have not seen real evidence of this, nor has it ever worked out to be significant savings. Negligible, is the word.
So...here we are....bloggers journalists and users alike....totally and completely taken in by the idea of a "low-cost" iPhone.....when it already exists....sort of. Today, it's called the iPhone 4S. Last year it was called the iPhone 4. Before that it was called the iPhone 3GS. Getting it yet?
However, I have been under the impression that Apple was going to deviate slightly from this routine, and I believe this year is the year. If things remain on the routine path, Apple will release the iPhone 5S as the flagship iPhone, and keep the 5 around at $99.
Instead, this year, Apple has been hard at work designing a "New" $99 iPhone to sell, instead of demoting the 5. The new $99 iPhone will feature most of what the iPhone 5 features, with certain things tweaked/added/removed to accommodate their design. It will of course, come in colors.
Just as there always is, there will be more than enough to differentiate between the flagship device and the new cheaper device. And it will be perfectly suited to become a new category of iPhone. One that remains year after year, and gets updated alongside the flagship iPhone. No more selling "last year's iPhone" at a reduced price. Apple will instead shape a "new" product around it each year....as most people have no idea except what they can see.
Remember people, selling last year's iPhone at half price has been VERY popular and successful for Apple....because of the price. Imagine how much more successful it will be when the price is the same, but it is perceived as a "new" product. The answer...VERY VERY.