Well they just released the 5s and 5c and the 5c is doing generally horribly - they just cut huge production even with the holiday season quickly approaching. If you have read Jobs biography it answers it for you. I will try to find the passage. Basically, Jobs believed that consumers couldn't be making the decisions if there was too much stuff on the market. He wanted a minimal product line where every product was the best. Immense time, energy and focus went into developing and updating the existing products. There was 1 laptop. 1 desktop. As time went on the line grew a bit - you had one power desktop (the Mac Pro - completely updatable, swapable etc) and the Mac Mini. Then you had the 1 iPod, 1 iPhone and iPad. The iPods were the first line to be diversified but it took a long time. First it was just the regular one and the shuffle. Then they introduced the mini. Each was targeted to vastly different markets - the shuffle wasn't for a different price point, it was for people on the go. The computer line did the same. They introduced the Mac Pro (the tower) and the Mac Mini and the mid-range all-in-ones. Again, these weren't aimed at different price points as much as different markets. The Mac Pros used to be the only thing you would edit video on. They were easily updatable, enormously expensive but you had 4 memory slots and 4 hard drive spots and more holes for firewire and USB than you could count. You could get 32gb of ram in them in 2005. The Mac Minis were for people who didn't want to fuck around, they just wanted to go online. They diversified the iPad line similarly - waiting until it was a resounding success and then offering the same thing in two different sizes. This is starting to get away from Jobs though because there really isn't a reason to have two different models besides to keep the brand fresh. The difference between how they split the iPads and how they are now splitting the iPhone is that the iPads were different sizes. The problem with the 5C is there isn't really a difference - the 5C is just plastic and cheap looking. I don't have faith in this 5c and 5s business. They aren't for different price points or for different markets (here in the US.) People are saying that the 5C is mostly targeted to Asia to cut out a corner of that market. Some people are saying they are for kids. I don't know.
It was explained to me that 5c is really just the five, but with less expensive materials and a fresh look aimed at those who would like that sort of thing. They've always sold three iphones: flagship 199 on contract, last years model 99 on contract, and the year before that free on contract. So they've got all price markets covered there save for the unlocked crowd (in other news NEXUS FIVE!) So last year, they were selling $199iphone5, $99iphone4s, $0iphone4. They want to bump everything forward this year and drop the iphone4. Except a $99iphone5 is kind of awkwwwaaaard. I mean, for them it still carries really expensive materials but you're selling it for cheaper so profit margins take a hit. And the look of the phone with all those expensive materials is dilluting iphone5s look. 5c will probably start selling later, because the wait-in-line for a phone probably wants the 5s, but the buyer with a contract expiring might be more inclined to go for 5c. It's worth pointing out that an alternate universe un-c'd version of iphone5 would probably have sold less than 5c. All this is interesting in that the major innovation here seems to be Apple as Primarily Fashion and then working behind the scenes to make that fashion as cheaply as possible. It's a good business strategy that only they can really execute here. For me, it's interesting but unexciting. I'm all about android's flexibility and it's integration into google's incredible service arm.