Whether you guys want to believe it or not, the iPhone used to be a status symbol. It used to be ", OH, YOU HAVE AN IPHONE?????" but now it's simply, "Oh, you have an iPhone". It's price point at $199 made it a phone of great status. The iPhone was the phone to have. But all of this changed when they released the 3GS (?) and they reduced the price of the 3 (?). Ever since this, people have been opting for the lower-cost options, making it increasingly harder to sell their latest models. In fact, I read an article a few weeks ago, and it stated that over half of the iPhones in use are the 4s and the 4S's. That's so different from years ago, when the latest model iPhone dominated their sales. The fact that anyone can get an iPhone for free has really devalued their brand, and it no longer makes the iPhone "the cool phone" anymore.
The iPhone 5C, or whatever they choose to call it will continue to devalue their brand.