Not so budget: iPhone 5C to cost $400-500, fit between iPhone 5S and 4S in Apple's lineup54
The idea that Apple would release a $200 budget iPhone was one that started because one man (and notorious Apple fanalyst) Gene Munster simply repeated the rumor as many times as he could. The prediction was based on the worst possible idea that Apple needed to have a budget device, so Apple would create said budget device, despite there being little to no evidence that it was going to happen.
Once we heard about the iPhone 5C, people started connecting the dots with Munster's claims, and here we are. But now, a much more reliable source: KGI's Mingchi Kuo is giving a much more believable story. Kuo says that the iPhone 5C is designed to replace the iPhone 5 on store shelves and in the price lineup, saying:
Additionally, Kuo is saying that we may actually see the iPhone 5C earlier than we thought, because an TDD-LTE version of the device may be headed for China in time for the country's October Golden Holiday, assuming the deal with China's largest carrier, China Mobile, do reach a deal. The iPhone 5C would still launch in Q4 in the U.S. and the rest of the world.
This new scenario sounds much more plausible to us, because it allows Apple to continue to control its supply chain and costs, while not directly pandering to the low-end (something Apple hates to do), and it allows for a bit of differentiation in devices. With this plan, the three devices that Apple would sell: the iPhone 5S, 5C, and 4S, would all look different, instead of the top two looking exactly the same. And, no doubt Apple can build the 5C more cheaply than the iPhone 5, which helps boost profit margins.