Marco Arment nails it:

Apple’s intentionally pushing their flagship product downmarket. They’ve lost a lot of sales over the years because the iPhone was too good: people who didn’t want to spend $200 and up for a contract phone, people who thought they didn’t need a high-end phone, people who thought the iPhone was too fragile for their lifestyle. The new 5C, and iOS 7, looks more casual and costs $100 less. The message is clear: this is a phone for everyone. Whether that holds up remains to be seen.

Exactly.