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Anyway it is Apple that thinks a cheaper iPhone is needed.

Apple to launch 'low-end iPhone' without Retina in 2013 - "The low-end iPhone will have the same 4-inch form factor as the iPhone 5, but will have a plastic casing and no Retina display," he said. "With a lower price point, AAPL will be able to target a growing and important part of the smartphone market (sub-$400 price band)."

http://appleinsider.com/articles/13/03/22/rumor-apple-to-launch-cheaper-iphone-with-plastic-casing-non-retina-display-this-summer