iPhone 5C

• Made substantially from plastic
• A cross between an iPhone 5, fifth-generation iPod touch and iPod classic
• 4” screen
• Back similar to fifth-gen iPod touch
• Shape similar to iPod classic

Apple is rumored to be building a “budget” iPhone. Though the company typically doesn’t make models perceived to be of “lower quality,” Apple presumably sees a way to gain customers in developing countries with a cheaper iPhone. The subscriber base of China Mobile, for instance, is a huge potential market that could be tapped by a more affordable Apple device.

We believe that Apple’s rumored “budget” iPhone is planned for a 2013 release. Our sources claim the phone will be priced lower than the iPhone 5, of course, and that the device will be mostly made of plastic, with a Lightning connector. It should look something like a mix between the iPhone 5, fifth-generation iPod touch, and iPod classic — an iPhone 5-style 4” screen, an iPod touch bottom, and an iPod classic shape, with flat sides connected by curves. The dimensions should be about the same as the iPhone 5, with Gorilla Glass used for the screen — which will stick out slightly from the enclosure — and elongated volume buttons similar to the iPod touch.

A camera, microphone, and rear flash similar to those of the fifth-generation iPod touch will be included. Also, a headphone port, Lightning port, bottom microphone, and speaker will be in positions similar to the iPhone 5, but with fewer holes. For further details, read our Backstage article from January.

When this device is released, the iPhone 4 and 4S will likely drop out of Apple’s lineup. The most likely reason for this would be so Apple can stop producing Dock Connector iPhones. Because this is a new product, Apple could conceivably build in more network support to expand its compatibility with international mobile networks.

Other rumors:

The Budget iPhone will come in a number of different colors beyond black and white; possibly four to six colors or more. Blue, red, yellow, navy, gold orange, gray, pink, green, and yellow-orange have all been mentioned as possible color options.

It will be powered by Qualcomm’s Snapdragon system. We don’t believe this is credible.

The budget iPhone will be released alongside the 5S. It is said that it will be released in June, July, or August.

Small-scale production of the phone will begin in May, with mass production ramping up in June.

It’s possible it will run off an A5 processor similar to the single-core A5 processor inside the Apple TV, which was very quietly updated without any explanation.

This model might compete with—and possibly even replace—the $299 fifth-generation iPod touch, sales of which appear to be on the decline. Alternately, Apple could drop the iPod touch entry price to $199 and keep it around as a slightly more powerful model.

The frequently questionable Digitimes claims that Apple will launch this model in late 2013 with quarterly shipments around 3 million units, “to test market response.” We find that highly dubious; assuming that the report is correct regarding the date and numbers, it’s more likely that the suppliers leaking these numbers have only been contracted for a small segment of the new phone’s production.