This report makes some sense. If it’s accurate, Apple will discontinue the iPhone 5 with the introduction of the iPhone 5S and the plastic iPhone.
In recent years, Apple has released new iPhones while dropping the price of the previous models down to $99 or less on-contract. If Apple does actually have a plastic iPhone on the way, it’s possible that this will become the new lower-cost alternative to those who want to own an iPhone.
All that said, it’s important to remember that the plastic iPhone is still a rumor. Furthermore, we don’t know Apple’s plans for such a device if it does exist. There is no sense in anyone getting too excited or worked up over this rumor yet. However, it does sound like a possible strategy for Apple.