It is ironic that Apple is mentioning this as I believe this is going to spell the end of their era of massive profits. Phones now are getting to the state where much like PCs, the older phone is good enough, and the new phone is not substantially better. There will always be people buying a phone for .2ghz more CPU or some slightly higher res screen, but the days of rapid evolution of mobile devices are over, and Apple is going to have problems selling someone a $6-800 phone every year or 2.