There are currently 3 or 4 strong rumors floating around the Apple-centric blogosphere these days: the iTV, the more recently popular iWatch, and then the recurring low-cost or ‘budget’ iPhone. What’s funny is, some of these rumors have been around for years.

But if you ask The Wall Street Journal, Bloomberg, or anyone at Piper Jaffray, the budget iPhone will finally materialize this year. Reiterating its report from January, the firm sent out a note to investors claiming that a low-cost iPhone is on the way…

From Piper Jaffray’s Gene Munster (via AppleInsider), who oddly enough, is not talking about Apple’s TV plans:

“We believe a lower priced iPhone will be a positive for AAPL shares for two reasons,” he writes. “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.”

Of course Apple releasing a lower priced iPhone would be good for its stock. Heck, releasing anything would be good for it at this point. But Apple has said that it isn’t about that. It’s not into chasing Wall Street or marketshare, it just wants to “make the best products.”

low cost smartphone chart

But Munster works hard to prove his point. Looking at Germany, UK, France, China, Brazil and India, he points out that Apple’s lowest priced iPhone it’s selling right now, the iPhone 4, is still 133% more expensive than the global average for a low-end smartphone.

So as of now, Apple’s not getting a very big piece of the low-end pie—a pie Munster projects will be worth $135 billion this year. And to remedy this, the analyst believes the company is going to debut an affordable ($199) handset in the second half of this year.

Now, I’m no expert, but here’s where I stand on this: I don’t doubt that Apple has a less expensive iPhone in the wings. There’s just too much smoke to not be a fire. But I imagine it’s been in the works for a while, and it isn’t some attempt to appease stock holders.

As for if it’ll finally turn up this year, a lot of folks think it’s going to happen. But I’m staying skeptical until components start leaking.

Where do you stand on the budget iPhone rumor?

  • Didn’t Tim Cook made it clear to everyone that they won’t make low-cost iPhones…. if you want low-cost, get a 4 or a 4S

    • Melvco

      I hear this response a lot, and I’m not sure if folks are just misunderstanding the context, or what. But the whole point of Apple releasing a ‘budget iPhone’ would be to offer low-end and prepaid consumers a $200-$300 handset.

      For a full retail iPhone 4 and 4S, you’re still talking about $400 and $500. And those prices aren’t cutting it right now in countries like China—who just became the largest global market for smartphones—and India, which are dominated by prepaid customers.

      These people are buying $150-$200 Android phones—Android has 90% of the smartphone OS market in China.

    • RarestName

      “We will never make a smaller iPad.”

      • Jobs said it. But Cook made it.
        Cook said it. Who will make it then… Jobs?

  • Muhammad

    I’ll believe this low cost iPhone when I see it

  • You lost me at analyst. looooooooool.

  • Tikimaker

    It makes sense look at what apple did so everyone can afforded an iPod. Nano iPod.