The iPhone 5 and iOS 6 was launched a couple of weeks back. Since then many users have been complaining about the purple color image distortion issue which has been recognized as a bug in the software. Apple has since publicly come out with a statement telling the resolution to solve the matter.
A purplish or other colored flare, haze, or spot is imaged from out-of-scene bright light sources during still image or video capture.
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.