Tim Cook mentioned during the earnings call of third quarter that the September quarter could be affected by a product transition. Here is what I feel will happen. Both iPhone 3GS and iPhone 4 will be discontinued and replaced by iPhone 4S as a low cost iPhone. Now, why will Apple discontinue the best seller iPhone 4? Probably to fix the antenna and not give everyone another chance to criticize the iPhone. The 4S will be similar to iPhone 4 but will come with an A5 processor, redesigned antenna and iOS 5. iPhone 4S will be the first phone available in October priced at $49 for 8GB, $99 for 16GB and $149 for 32GB, available in black and white on AT&T, Verizon and Sprint. iPhone 5 will be Apple's newest flagship device. With a complete redesign, iPhone 5 will be the thinnest and lightest iPhone. It will look similar to the iPad 2, and will have the A5 processor, 512MB RAM, 8MP camera and iOS 5. It will be available only on AT&T and Verizon and priced at $199 (or $249) for 16GB and $299 (or $349) for 32GB. The reason Apple might price the 16GB iPhone 5 for $249 will be to probably introduce the 8GB iPhone 5 for $199.