Apple Planning iPhone 5S and Cheaper Version of iPhone 5 in 2013

Apple is expected to release the iPhone 5S and a cheaper version of the iPhone 5 sometime this year.

DigiTimes published a new report backtracking on its earlier claim that stated that Apple would launch two iPhones this year with bigger screens and lower price tags. Instead the company will release two 4-inch models including the iPhone 5S, which should feature some new specs including a faster processor, and an iPhone 5 that's form factor might be based around a plastic shell in order to make it more affordable for low-end markets.

The report also notes that Apple might struggle to bring in-cell display technology to a lower-cost iPhone due to issues with yields on the panels. This technology allows for the thinner profile seen on the iPhone 5, however, yields on it are said to be improving.

Other iPhone 5S rumors have pointed to a June or July release for the device and a new report is confirming this information.

Jeffries analyst Peter Misek released a new research report that states that Apple's iPhone 5S is still in line for a June or July launch this year with production starting in March.

"Our checks indicate that preliminary builds for the iPhone 5S will start in March for a launch in June/July," said Misek. "As word of the earlier production schedule starts to spread, we believe we could see a slight slowing of demand CQ1 in anticipation of the new product launch and Apple will likely start curtailing channel inventory."

Misek also stated that he has been seeing signs of two iPhone 5S prototypes currently in testing, with one of these being the cheaper iPhone.

"Similar to the iPad Mini, we expect a concentrated low-cost iPhone rather than a 'cheap' one. Likely specs: polycarbonate case with 4-inch non-Retina display and no LTE," said Misek. "We believe a new low-cost iPhone would increase Apple's share, decrease [gross margins], but have little impact on [earnings per share]."

Misek also addresses the iPhone with a 4.8-inch display that he mentioned in an earlier report. He says that he has seen no further signs of the handset and that this form factor is probably for the iPhone 6.