Apple is unveiling two new iPhones next month, and here’s why

So… I have been thinking about this a lot lately (as has anyone in this industry), and basically no one has any clue what Apple is releasing as far as smartphones go this year. While there have been credible leaks and reports, Apple has played a masterful chess game confusing not only its competitors but the tech press as well. One leak contradicts another report, one mainstream publication contradicts another mainstream publication, one analyst note contradicts another’s research note. Let’s break this down logically, together. Apple has an iPhone 4 that is over a year old and is still the best-selling smartphone in the world. In fact, it’s still the best-selling smartphone on practically every carrier in the world that sells it. Apple could easily update it with the company’s A5 processor and an 8-megapixel camera, but is Apple really going to break from its traditional summertime release schedule just to dump in a new CPU and camera? What’s the point? Read on for more.

Is Apple going to sell the iPhone 4 at $99 and the “iPhone 4S” at $199 alongside it? Nearly identical phones in terms of physical appearance? Someone walking into a store is going to have to choose between the iPhone with the faster processor and better camera and one with a slower processor and a still-great camera? Hardly. If there even is an actual iPhone 4S — one that’s sole purpose hasn’t been just for high-profile iOS developers to use a test sled for Apple’s new hardware that’s coming in the iPhone 5 — my bet is that it will replace the iPhone 4, but the iPhone 4S will still be the entry-level iPhone.

Why? Because Apple can afford to take a, what, 15%-ish margin hit to deliver a better iPhone for a better price of $99 on contract. The company can introduce it only with 8GB of storage, too, making up some of the component costs of the A5 CPU and the 8-megapixel sensor. Why would Apple do such a thing? It won’t only damage the competition, it will crush, destroy, and eliminate them. And if the iPhone 4S is in fact just a developer tool, then the iPhone 4 will move to this entry-level space to make room for the star of the show.

Then there’s the iPhone 5 that everyone is waiting (and hoping) for at $199/$299, which will be another leap above anything the competition can offer. IPhone 4 or iPhone 4S — it doesn’t matter. A redesigned iPhone 5 is coming as well. It will be faster, it will be probably the thinnest smartphone in the world, and it will possibly introduce gestures in addition to voice control capabilities. That’s what my scenario looks like, and hey… even Al Gore says the multiple iPhones are launching next month.