Refreshed internals, lower price point possible.
Apple Publicly Responds to Complaints of Purple Lens Flare on iPhone 5 Photos
Photos with purple flare taken by iPhone 4S and iPhone 5 (Source: The Next Web)
Last week, Gizmodo reported that Apple had responded to address the issue, with Apple's support staff providing an emailed response to a user inquiring about the purple flare. According to Apple's engineers, the issue is indeed normal and users are advised to point their phones away from bright light sources when taking photos.
Our engineering team just gave me this information and we recommend that you angle the camera away from the bright light source when taking pictures. The purple flare in the image provided is considered normal behavior for iPhone 5's camera.Following that private email response regarding the issue, Apple has now posted a public support document recommending similar action to minimize the issue.
Most small cameras, including those in every generation of iPhone, may exhibit some form of flare at the edge of the frame when capturing an image with out-of-scene light sources. This can happen when a light source is positioned at an angle (usually just outside the field of view) so that it causes a reflection off the surfaces inside the camera module and onto the camera sensor. Moving the camera slightly to change the position at which the bright light is entering the lens, or shielding the lens with your hand, should minimize or eliminate the effect.The iPhone 5 uses a similar camera to that found in the iPhone 4S, although Apple reduced the camera's thickness by 20% in order to fit into the thinner body of the iPhone 5. Apple did, however, add a several enhancements to the camera in the iPhone 5, moving to a sapphire lens cover, improved image signal processing and noise reduction, and a new dynamic low-light mode.