09/26/2011 09:51 am ET | Updated Nov 26, 2011

IPhone News: Cheaper Model Won't Debut Alongside IPhone 5, Source Claims

By John Paczkowski

Apple will unveil only one iPhone at its forthcoming Oct. 4 event, not two as has been rumored. That's the word from Wedge Partners analyst Brian Blair who believes the company has no plans to introduce a second lower cost, prepaid version of the device alongside the first.

According to Blair, Apple's fifth generation iPhone will be an incremental update to the current iPhone 4, not a major redesign. It will feature a faster A5 processor, a higher-resolution eight megapixel camera and possibly a larger screen. But beyond this, its design will be largely similar to that of the iPhone 4.

Says Blair, "We don't expect a second, dramatically different iPhone to accompany this as we don't think Apple needs to have 3 models in the market to address the high end, mid-tier and low end since the iPhone 4 (with memory lowered to 8 GB) will drop to $99 and effectively attack those markets."

That's an argument that does make a lot of sense. Supply chain chatter has suggested Apple's pre-paid iPhone, the so call "iPhone 4S," would be identical to the iPhone 4 with some minor cosmetic changes, a better camera, and faster processor. Which means it would likely cost more to build.

"Why would Apple bump up only the processor specs of the iPhone 4 in addition to a newly designed iPhone 5 if the goal is to sell it into the pre-paid market at a lower cost," Blair asks. "A 4S would simply cost more and a 4S itself wouldn't create a mid-tier market unless it was priced at $99 and the iPhone 4 went to $49 with the new iPhone at $199. We see this scenario as unlikely."


Via Only One New iPhone This Year and It Will Look a Lot Like the iPhone 4, Says Analyst on AllThingsD

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