At first I also couldn't figure out why 5c was not cheaper, and why Apple decided to keep the 4s for another year. But here is what Apple probably had in mind when deciding to come up with a 5c model in the first place: 1. iPhone 5c is meant to push people to buy iPhone 5s: because iPhone 5s is too similar with iPhone 5, more people who are indifferent between 2013 and 2012 technology would chose iPhone 5 for its price. Making the second-tier iPhone of 2013 into a plastic-packed iPhone 5c would encourage more people to go with 5s. 2. iPhone 5c is meant to push up the margin: for those who really don't care about what CPU or other fancy technology packed inside their phones, or those who really want to spend $100 less, buying iPhone 5c means big revenue per sell for Apple. 3. Keeping iPhone 5 would probably also affect the iPhone 5s production, since they use the same casing (random thought). So the logic probably becomes: - For consumers who are buying an iPhone this year, encourage as many of them to buy iPhone 5s. If Apple were keeping the 5 this year, some of them would just go for 5. - For those consumers who really want to spend $100 less, earn more revenue from them. If Apple were keeping the 5 this year, they will have less margin compared to 5c.