John Gruber, in a smart piece, as usual, on the new low-cost model:
If Apple does unveil an iPhone 5C, I expect them to concurrently abandon the iPhones 4 and 4S. Their three pricing tiers for the next year would be a new iPhone 5S at the high end, today’s iPhone 5 in the mid-range, and the new 5C at the low end.1 This way, all new iPhones would sport 16:9 aspect ratio displays, and all would have Lightning adapter ports. Adios both to 3:2 displays and the grody old 30-pin port.2
Makes sense. Better to have uniformity across the board in terms of Lightning, etc.
I also agree with this bit:
Apple can withhold cutting edge software features from old devices; they can’t do that for brand-new ones. There can be no penalty for buying a lower-priced iPhone 5C, only rewards for splurging on the higher-priced models, and those rewards should revolve around hardware (camera quality, CPU speed, fingerprint sensor, etc.). The 5C is not about selling a piece of junk to some sort of unwashed masses; it’s about continuing to push the price down to expand the iPhone’s market without changing what the iPhone brand stands for. Siri is now a big part of that brand. If Apple thinks the iPhone 5S needs “protection”, then the 5S (and Apple itself) has problems.
I can't see Apple artificially crippling the 5C precisely for the reasons Gruber outlines. They know Siri is part of the iPhone's brand, so my guess is they'd differentiate, as Gruber suggests, by hardware features alone. The oft-rumored fingerprint sensor in the high-end 5S would be that feature.