The iPhone 5 is more expensive to manufacture (Cameras to match the glass inserts, Scuffgate etc...) and i doubt that they would sell such an expensive to manufacture device for 450$ in 2014 - so they will release plastic-case versions of older devices in the future - and they start NOW, because of the larger screen and Lightning.
Putting aside the whole issue of cost and investment of producing an entirely new enclosure (which isn't peanuts) and I know that unless you work in Apple pricing you don't know what the heck you're talking about (i.e. 450$ -> that was pulled from rumors and isn't real), why would they do this, when we all already expect they'll keep this enclosure for the new iPhone 5S?
Let me explain: They just released a new iPod Touch, an entry level, but they didn't create a new enclosure, but you believe they will with this new iPhone version? Why with one product and not the other? You must know that Chewbacca does not live on Endor, so the assertion that Apple is building an entirely new chassis for an entry level phone just does not make sense!
What other differences would you expect in this new phone aside from materials?
My main question, though to you and everyone else that insists this is a cheaper iPhone: how will Apple differentiate these two iPhones? It won't be on price, because history tells us: 1) they never call an iPod Shuffle, the cheap iPod Classic; the Mac mini, the less expensive iMac; or the iPad mini, an iPad for poor people. They differentiate these products based on features and functionality. So, this new iPhone with an entirely new chassis will be different from the iPhone 5S in what ways? (without thinking of price)
We can make assumptions about its features and functionality - retina screen running iOS 7 (4" screen in a world where Apple hates fragmentation), so that pretty much means every app in the App Store today that runs on the iPhone and iPod Touch will work on this device. Reduced storage? That is possible, but a new chassis for this? Two iPhones sitting side by side on a shelf, one is running iOS 7, the other is running iOS 7, but can pretty much do the same things but has a plastic case (and "cool/hip" colours) and costs much cheaper (bonus!), which one does the average consumer buy? Which one does Apple want them to buy? Why would Apple give its prospective customers a cheaper option (which means less profit) meaning an incentive to buy the product they don't want them to buy?
Apple doesn't market it products on a "price scale" - it doesn't view its products (or promote them to the world) in this way, but for some reason people here do. My question is this: what do people here know that they don't?