While there is already a $0 (on contract) iPhone, there is room for Apple to introduce another.
When the next generation iPhone comes out (5S?), there will be only one device left with a) a 30-pin dock connector and b) a 3.5" screen. A retooling of an iPhone 5 with a cheaper case and the current 4S internals might make sense to hasten Lightning and 4" screens (for devs) ubiquity.
This would of course replace the 4S in the next revision of the iPhone line.
In response to my argument for Apple retooling their $0 iPhone, and to all of the "it's needed for developing nations" arguments, there's the fact that above all else, Apple is an engineering company.
Look at the last few years, 2012 especially. Just about every product they introduced was the best product Apple ever designed. Not just in it's product line, but in all of Apple. The iPad 3 was the best designed and manufactured, the Retina MBP was then the best designed and manufactured with the best screen they've ever used, then the iPhone 5, by far and away the best designed and manufactured and (just a few months after the rMBP) the best screen they've ever used. The iPad mini had many of the design and manufacturing elements from the iPhone 5. The iMac came out at the same time and was one of the best designed and manufactured products they've done.
If you also look at the elements in each of Apple's products, they carry many of the same design attributes, and not just aesthetically. The unibody, the screen lamination, while it wasn't discussed I'm sure the iPad mini now uses the same case to part matching that was described in the iPhone 5 intro. I'm sure that the friction stir welding will be used in upcoming product refreshes as well. These things cost a lot of money, and are a mark of pride for Apple. To release a new product (and to Apple the iPad 2, and 3 were entirely new products though I'm sure the 4 wasn't) without at the very least incorporating the most sophisticated design elements they know how would hurt their pride.
They don't care about catering to emerging markets nearly as much as they do making the best product they know how. They are making money hand over fist, and therefor can afford to concern themselves with what they've been concerned about for the last decade, what they reiterate in every single video they release, to make the best product they can.