Budget iPhone (Nickolay Lamm and Matteo Gianni concept 004)

We usually don’t put our faith in Apple rumors originating from Asian part suppliers who often just make stuff up in the hope of banking on free press to promote their business. But ETrade Supply is different. The parts and repair shop last year leaked accurate photos of the iPad mini display panel, as well as the iPhone 5 front and back panel, to name just a few.

This points to ETrade Supply having some solid sources in the Apple supply chain and probably inside Foxconn, Apple’s favorite contract manufacturer. In a blog post published Monday, the supplier claimed its was able to confirm with its sources that Apple indeed will be releasing lower-end iPhone models this year…

According to ETrade Supply:

We just heard “on the wind” confirmation that Apple will in fact be releasing lower end models. This is not the game changing move that we are used to from Apple which had kept them on top for so many years.

Again, don’t dismiss the report as ETrade Supply clearly has solid connections inside Foxconn. In addition to the Apple leaks, the parts supplier three months ago posted the first parts from the Blackberry Z10.

Wall Street observers at J.P. Morgan predict that the so-called less-pricey iPhone will actually be a mid-range device, costing around $350 and sold unsubsidized and off-contract to cash-strapped buyers in emerging markets, where a bunch of inexpensive sub-$200 Android handsets have reduced Apple’s market share to single-digit figures.

The sometimes-reliable DigiTimes wrote last week that Apple could initially put out only three million budget iPhone units in order to “test market response”.

KGI Securities analyst Ming-Chi Kuo, one with an accurate track record of predicting Apple’s product plans, cautioned recently that Apple has pushed back the device because its slimmer-than-usual polycarbonate casing is not as trivial to manufacture as previously thought.

Budget iPhone (Martin Hajek 003)

“The slimmer casing may make it more difficult to ramp up production yields of coating and surface treatment, and could slow down the shipment timetable,” he wrote.

Despite the rumors, Apple is traditionally being mum on its product roadmap.

We’re also not expecting hardware announcements at the upcoming WWDC 2013, a software-focused five-day conference where Apple promised to “get new versions of iOS and OS X” into the hands of its registered developers.

In addition to the budget iPhone, Apple is also believed to release the iPhone 5S with fingerprint identification technology, a 12-megapixel camera with improved night shooting and a faster A7 chip (pre-orders could start as early as June 20).

Cook & Co. should also revamp Apple’s full-size iPad with a fifth-generation model adopting the iPad mini design cues, with a new display assembly allowing for a lighter and thinner appearance. A Retina-fied iPad mini 2 is also expected in Fall, with an improved model due in the first quarter of 2014 and reportedly containing a faster processor.