The iPhone 5 is longer and significantly thinner than its identical-looking forerunners. This means that it's more comfortable to hold, and it practically disappears in a pocket. This is only accentuated by its aluminum back, on the other hand, the backs of the iPhone 4S and iPhone 4 are made of glass.
2. Display:
While the iPhone 5 still has a Retina Display, it has a much larger screen. Unlike the 4S's 3.5-inch 960x640 Retina Display, the 5 has a 4-inch screen running at 1136x640 pixels. When you download YouTube videos on iPhone, especially iPhone 5, movies plays smoothly without pauses.
2. Processor:
There are noticeable boosts of speed in each successive model. The A6 chip in the iPhone 5 is a screamer, breaking smartphone benchmark records. A6 ports a Dual Core 1.02GHz processor. On the contrary, the Apple iPhone 4S runs on 1GHz Dual-Core Apple Verizon and Apple iPhone 4 runs on 1GHz Apple A4.
3. Camera:
The camera in the iPhone 4S was a big leap ahead of the shooter in the iPhone 4. The difference between the iPhone 5 and the 4S is relatively small. Apple did improve a key area in the iPhone 5: low-light shooting.
4. Battery life:
Specifically, Apple estimates that the iPhone 4 and iPhone 4S models both provide 6 hours of Internet use on 3G, whereas the iPhone 5 provides 8 hours. For the iPhone 4 and 5, Apple estimates 10 hours of Wi-Fi (and only 9 hours for the iPhone 4S). For talk time, Apple estimates 7 hours on the iPhone 4, but 8 hours of talk time on 3G for both the iPhone 4S and iPhone 5.
5. Operating System:
iPhone 5 comes with iOS 6, the world’s most advanced mobile operating system with over 200 new user features. Apple iPhone 4S equips with iOS 5 and iPhone 4 equips with iOS 4, now are all upgradable to iOS 6.0.
So do you splurge for the latest and greatest, or save a few bucks with Apple's older budget iPhones? So my suggestion is: If you can afford an iPhone 5, get an iPhone 5 since it is the best phone from Apple now. If not, get the best iPhone you can afford and be 100% happy with your purchase.