Apple is a business.
Purely from a competetion and profit standpoint Apple needs to introduce 2 phones to remain compeetive with Android flavors.
Why?
The 3GS is ancient in tech years. I think its a great device still, but other than the budget conscious and developing natons it not going to sell a ton in America. Perhaps Apple keeps this as a free phone with contract to insure iOS at least has a free offering.
The iPhone 4. Great phone, and with iOS 5 will seem like new to everyone. That said, it is also in middle age tech wise.
Apple has never done well in a spec vs. spec comparison be it PC or phone. The iPhone 4 with iOS5, and the Apple ecosystem has a lot of life yet. In all honesty, probably greater than 50% of users will never tax their iPhone to the limits. With iCloud even capacity becomes less critical. ven the less than ideal 3G carrier speeds are 'good enough' for most. It is possible Apple pushes the costs down on this model and or retires the 3GS and makes this one free.
The iPhone 4S rumored about. Same form factor, fixed antenna issue, iOS5 optimized, and A5 chip. That would put it on oar with iPad 2. Tech spec wise its closes the gaps with Android models. Leaving Apple not at the top but in the running. sell at full price and get more converts, replacements and the bleeding edge must haves. Typical product life cycle stuff.
This holds Apple over for 3-6 months. Sales will be good but no spectacular here in the states. That said, China is a huge market and this phone could sell like mad over there.
That leaves Apple with 3 risks and a few deficiencies. Risk 1, no iPhone 5 when the world so anxiously wants one, especially so close to Steve's CEO retirement. Risk 2 the possibility of lagging behind Android flavor phones tech spec wise. Risk 3 the iPhone 4S having another antennagate issue (Personally I think it was a non issue and has been solved in the next generation anyhow). Consumer reports really rates the iPhone 4 well except for the antena issue. An iPhone 4S could solve that and get the iPhone back as a best buy choice for Consuemr Reports. This gets news and people buy based on those tid bits they here more than 1.2 GHz vs. 1.4 GHz.
As for deficiencies, Apple does not have LTE/4G. Steve has said they want a lower power LTE chipset. I believe this. No one wants to charge the ohione mid day. With my old 3G I had to do this often if I used it alot. With no user replaceable battery it would be a PR disaster.
AT&T has nearly no LTE support. Verizon only slightly more. A massive launch of iPhones would bring all American carriers to their knees in terms of this.
Last is the part Apple cannot control. Contracts and pricing from the telecoms. As these style phones become more ubiquitous and common bandwidth increases. iCloud will only worsen this. Next generation data will also be impacted. Companies liek sprint, AT&T and Verizon are in business agianst one another and to some extent us the public. They need to have pricing we want to pay but keep us from using too much of their limited resource. Smart Phones are one of the worst thigs to happen to telecoms as they use bandwidth and that takes more towers, more switches and more real estate. All of that takes cash. Data caps, premium surcharges, even primetime data charges liek minutes could come our way. Yes, we all want 4G in every little crevice we go, but that does come at a price and we as consumers must be careful we do not demand something we cannot afford to support.
Apple does not exactly want a phone where it starts at $145 a month for service. The profit and payback for the telecoms is not yet there. They will charge a premium for 4G/LTE and if they are forced to roll out more and ahead of schedule they need to charge back their customers.
I think Apple does have an iPhone 5 ready to go. But does not yet feel the launch window is sufficient.
They will get very healthy world wide sales of an iPhone 4S. If they bide their time 3 to 6 months, carrier support improves, and as Android phones push out more and more tech ladden phones, Apple can hld back the iPhone 5 to release at the best time with a nice supply and smooth launch.
Apple has always had a very solid strategy. Their execution in recent years is often even superior to their technology. Yes, they have stock constraints, but I am talking strategic execution of the plan. Wether planed or adapted, their release of the original iPhone, paving the way for the data conracts and usage, then each successive generation, integration iPod touch into app store and developing that property to form en ecosystem has been a huge success.
If iOS 5 works, and apps run well and there is no lag, then what percentage of consumers really care how much RAM or what CPU is in their phone? Very few. If Joe Consumer can pull up nearly any song in their library from the cloud then storage is not even as critical. Need a bigger screen- get an iPad 2. For most 3G is plenty fast for games, email and what they need.
A small percentage of users, mostly those of us who comes to sites liek MacRumors are bleeding edge. We know the specs, appreciate them and want utmost performance. But I promise the majority of iPhone users and buyers want an affordable phone that works and works well and has an affordable monthly rate. Apple will deliver that far betetr than Android can for the time being.