The soaring value of the market for budget smartphones makes a cheap iPhone even more likely this year, an influential analyst claims.
In a note to investors, Gene Munster of Piper Jaffray predicted that the market for low-cost handsets will reach $135 billion in 2013, providing a revenue stream that Apple can surely no longer afford to be sniffy about.
Munster, who has long predicted the advent of a more affordable iPhone priced around $199 on pay as you go, claims that the handset would be the tonic shareholders require after the tech giant's recent stock-market wobble.
Munster said: “We believe a lower priced iPhone will be a positive for AAPL shares for two reason.
"First, despite its lower margin, it should accelerate gross profit growth given the size of the low-end market (we estimate $135B in 2013); second, investors have historically bought into AAPL ahead of major new product releases."
"This low-end segment is important given we estimate it is a $135B market in 2013 that Apple is currently not participating in.”
Apple is expected to keep the cost of the handset down by swapping the current model’s glass and metal construction for a cheaper polycarbonate exterior and recycling parts from earlier iPhones.