The real reason Apple called it an "iPhone 4S" is that they want to start selling the 4 to the large segment of the market shy of the cutting edge. Plenty of people will buy something called a "4" when the state of the art is a "4S" -- there's no embarrassment there: "Oh, my discount phone is almost as good; it's just missing an S. And it's not like my friends will be able to tell that I'm using last year's model. It…
The 4S will sell to early adopters and power users, and the 4 will sell to more price conscious late adopters. Either way, Apple wins. They're already doing good with iPhone 4 production, probably have decent amount stocked, and production costs between the two don't change too much.