Is it internal reflections / Lens flare?
Almost certainly, yes. The most likely cause of the iPhone 5's purple haze is probably lens flare and internal reflections in the camera lens assembly. All lenses are succeptable to lens flare to some degree, and as you can see from the images at the top of this page, the iPhone 4S isn't immune either (ditto the iPhone 4 and competitive smartphones from other manufacturers).
But in our shooting we've found that it's a little more noticeable on the iPhone 5. So why is that? It's unlikely that the flare is solely due to the much-vaunted inclusion of a sapphire glass lens cover (although the refractive index of the sapphire glass is different to conventional optical glass, so it could be a contributing factor). Our money is on it being caused by a combination of different things, none of which, alone, is unique to the iPhone 5.
The primary way that lens manufacturers prevent lens flare is to coat the glass elements in an anti-reflective coating. The iPhone 5's lens elements are coated, but we don't know if the coatings are identical to those used in the iPhone 4S's lens. Maybe the sapphire glass has to be coated differently - we don't know. And we won't know, unless Apple releases a more in-depth statement about the technology.
Really, our advice is not to worry. Just do what you should do anyway, and avoid putting bright lights near the edge of the frame when shooting.