The iPhone 4, despite the love and admiration I have for the powerful little phone, is in need of an update. But, two updates? That's what Deutsche Bank's Chris Whitmore is suggesting Apple has in store for customers by years end.
I'm not one to take investment bankers' predictions seriously when it comes to technology, and a culture they have no clue about, but they do know the business side of things (sometimes). Whitmore is predicting Apple will indeed release an honest-to-goodness next-generation device, but that would be accompanied by a cheaper iPhone 4 S model that would retail for around $349. The phone would also be available to customers who use prepaid cell phone plans, a market Apple has yet to tap.
With Nokia and RIMM struggling the time is right for Apple to aggressively penetrate the midrange smartphone market (i.e. $300-$500 category) to dramatically expand its [total addressable market] and market share. - Whitemore
Source: Could we have two new iPhones this year? | Apple Talk - CNET News