Many phone manufacturers make a living putting a dizzying array of models on the shelves (Yes Nokia, especially you) with a wide price range that will appeal to the pauper, the rich man and everybody in between. Apple plays their game differently, they just rely on two versions of the iPhone; the current generation and the one before that.
For example: Since the iPhone 4 launched the iPhone 3GS is sold for a cheaper price, while the iPhone 3G has ceased to exist. Every year they keep updating the iPhone with newer hardware and/or iOS software releases. While having just two relatively expensive models does put off people, who don't want to/can't pay the premium for a phone, when you consider the iPhones flying off the shelves year after year, it seems that many don't mind the high price.
The iPhone 4 was a radical change from the 3GS. It added many features like the ultra-crisp Retina display, faster processor, front-facing video-call camera and a 5 megapixel sensor at the rear with 720p HD video recording. Yes, the feature list honestly doesn't sound out of this planet, as Android phones had all these things months before its launch. But for existing iPhone users, who've committed themselves to the Apple ecosystem, the iPhone 4 did give many reasons for them to upgrade.
And so we can only expect this yearly cycle of innovation to continue. June 2010 will bring the next iPhone and June 2011 will bring yet another new iPhone. I know it's a little too early to start speculating what the future versions of the iPhone will do, given that people have just settled down after the antenna design issue of the iPhone 4. I believe there are five things that ought to surface in the years to come.
http://www.techtree.com/India/Features/What_to_Expect_From_the_Apple_iPhone_5_or_4G/551-113472-899-1.html
