White writes that he is "now confident that a lower-priced iPhone will be launched by Apple in 2013, possibly as early as June." He suggests the phone could be called "iPhone mini" or "iPhone Air."
White adds that the new phone could have an unsubsidized price in the $250-$350 range, which is well below the $649 price for an unlocked 16 GB iPhone 5.
"A $250-$300 price range would also be competitive with China-based Xiaomi that offers a high-end phone experience at a mid-range price of ~$320 in China," he writes. "We believe a $250-to-$300 price point will allow Apple to significantly expand its reach in the smartphone market and better address developing markets such as China, while opening up more opportunities in Brazil, Russia, India and elsewhere."
The analyst said such a phone would have a lower margin than the full-priced iPhone, but above the corporate average when sold in volume.
He also contends that the arrival of a cheap iPhone could help spur a distribution deal with China Mobile, the world's single largest mobile carrier.