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Every year, someone says Apple should make a cheaper iphone...
I, personally don't think they need to - they might to temporarily appease shareholders- but they don't have to per se. This article quite rightly points out that older models mostly fill that gap...
I'd wager that Apple, being Apple has actually done some some pretty spiffy Excel jiggery pokery (sorry, I'm not in planning) to determine that the costs in terms of R&D, testing, software compatibility complexity increases and perhaps most importantly, the more nebulously defined "brand dilution" by introducing something plasticky, would not be offset by gains in profit margins (forget unit sales figures)...
Let's face it, keeping older models on the market allows them the luxury of clearing old stock at greater than cost price! i.e. Apple literally has a couple of years to shift leftover stock first to the lower shelves, then low/end retailers and finally overseas to less affluent markets, where the 3GS is still available.
And all of this while still making a profit of every device sold!
I'm sure (but have no proof, TBH) that other companies would love to be able to offload ancient, (by mobile standards) unsold stock, but instead they make a multitude of different handsets, each with separate inventory / models / options and have to keep these separate stocks available and recall them from the channel if unsold.
I still believe it is this almost Orwellian simplicity that is a pillar of Apple's strength, and every additional model, every additional go-faster-stripe dilutes this advantage.
In the end, I personally think they just need to stay focussed and up the ante on their main iPhone, which is still doing remarkably well by anyone's standards, and catch up with (or keep ahead of, depending on where you sit) the increasingly aggressive competition.
Biting the hand that feeds IT
