Several markets, including China, Europe, and Australia, are getting their hands on a lower cost 8GB iPhone 5c. The $99 (subsidized) 16GB model was apparently still priced too high for many users, and Apple would rather they don't embrace Android instead. With an 8GB model, Apple can hit price points below $50, or even free for subsidized customers and achieve lower no-contract pricing. This new model hasn't been announced in the United States, and that might not happen. In fact, some vendors like BestBuy have offered the 16GB iPhone 5c for free with a two year contract! Wal-Mart has the 16GB iPhone 5c for $29 with a two year contract.
While Apple just abandoned the iPad 2 in favor of the iPad 4 as their low-end, full-size iPad, the iPhone 4S remains on Apple's pricelist in the U.S. The iPhone 4S represents the last of Apple's 30-pin connected iOS devices and clearly its days are numbered. Apple wants to look forward and the iPhone 4S should be history by now.
So can an 8GB model iPhone 5c work? With a larger screen and Retina display, it will be tempting to watch and record HD videos on it, which can eat up that space quickly. Fortunately, iCloud and iTunes Match can help offload storage needs. It has also been suggested by Apple Insider that Apple's iOS uses less space than comparable Android phones. For example, the 8GB iPhone 5c has 4.9GB available to the end user whereas the Samsung 16GB Galaxy S4 only has 8.56GB free. Almost half the memory is taken up by Android. Of course many Android phones can accept microSD cards.
It should also be noted that an iPhone 5c No-Contract phone can be had for as low as $315 from Virgin Mobile. If an 8GB model brought that under $300, it could take sales away from Apple's $300 iPod touch. While the touch has 32GB, many may prefer a phone. I could add phone service later and I'd rather my kids have a device that can dial 911 even if it's not activated. Or if my iPhone 5s were to break, it'd be nice to have a spare phone!
Ultimately, the 8GB iPhone 5c model can be a great way for Apple to get their foot in the door of the low-cost market and keep Android at bay. And when the iPhone 6 comes out, presumably in September, there may be even more room to get the price of the iPhone 5c even lower.