Once you go retina, I think it would be hard to go back. But then again, the people that would buy the low cost iPhone, probably never had a smartphone with a retina or retina-like display
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But apps optimized for retina can still work on non-retina devices.
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The new App Store policy makes it seem unlikely that they will release a non-retina version.
But apps optimized for retina can still work on non-retina devices.