But one might argue that could have been the 5. (Or the 5C, now.)Let's speculate on the 4S: they need an iOS 'ecosystem' accessing phone the carriers can provide for free to subscribers.
Keeping the 4S makes the 5C more expensive, and perhaps out of reach for many. They can't really give a phone away for LESS than free, so the 4S is the free one (or $450 unlocked).
The 5C had to sell for something, so that one is the $99 phone (or $549 unlocked).
An iPad mini with cellular is $459. And there's odds the user won't even sign up for a contract. (The cell version has GPS/GLONASS, for mapping/location stuff, so many buy the cell version just for that and never activate the cell account.)
So, interesting to me that the 4S STILL sells for $450 unlocked. Yeah, gotta sell for more than the iPod touch at $229, but $450?
I think the 4S is what's cutting into the 5C sales. Not because people are buying the 4S instead, but because it exists at all, and that Apple had to price the 5C higher so there was differentiation.
Seems like the 5C should have been $0 and $99 ($450, $550 unlocked), and the 4S goes away.
But like I said before, we don't really need to worry about Apple. (World's most respected company, 10% of all business cash on hand, etc...)
They'll survive.