Every year, Apple has an update to the iPhone, and 2013 will be no exception. We can expect an improved version of the iPhone 5, which will almost undoubtedly be called the iPhone 5S, and we can expect the current iPhone 5 to replace the iPhone 4S at the $99 (with contract) price point.

But what will Apple do with the iPhone 4S? Normally it would become the no-cost or 99¢ option at the entry level, but with the widespread deployment of 4G LTE service, that’s going to be a harder sell these days.

On the one hand, that’s better for Apple, as it means savvy customers are far more likely to choose the iPhone 5 than the 4S, which has sub-par 4G service – far less than 4G LTE offers, although where available it is better than 3G service. On the other hand, with Android competition as fierce as it is at the low end, people might choose a “free” or nearly free Android instead of an iPhone 4S at that price point.

And if Apple really wanted to sweeten the pot for buyers, offer 16 GB of storage in the $99 model instead of the current 8 GB, giving low-end buyers another excuse to step up from the lowest-end iPhone. (Oops, that’s what they’re already doing!)

My guess is that Apple will release a new iPhone 4 model alongside the iPhone 5S. As 4G LTE support will be its biggest difference from the iPhone 4S, I would call it the iPhone 4G (second choice, 4GS) and pretty much make it an iPhone 4S with 4G LTE support. It would take the same cases and use the same dock connector as the current iPhone 4 models, making it a natural upgrade for those using an iPhone 4 and a good option for those with a 4S.

My favorite rumor is that Apple is working on a color iPhone 4 in colors similar to the iPod. I think that would be brilliant, especially at the low end of the market. No longer would you have to buy a case to make your iPhone distinctive – the color would help it stand out from the pack of white and black smartphones already on the market. It would also give iPhone 3GS, 4, and 4S users color envy, which could drive even more to upgrade to a newer model.

Expect all the new iPhones to ship with iOS 7, which will almost certainly drop support for the iPhone 3GS while continuing to work with the iPhone 4.

Keywords: #iphone4s #iphone5