There is an ongoing rumour that claimed that the low cost iPhone, dubbed as iPhone 5S, without a contract will be sold for $399.
An analyst said that if the rumours about the low cost iPhone are true that it will be released with a friendly tag price, the smartphone will significantly help in boosting the profit margin of the company.
Morgan Stanley analyst Katy Huberty wrote in a note for the customers that the cost of the low-end 16GB iPhone version, covering the manufacturing, the bill of materials, warranty and some other factors at a price of $244. Considering these factors, Huberty said that the low-end iPhone at a price of $399 price could have a neutral effect over the gross margin percentage of the company.
Moreover, according to Huberty, it is most likely that Apple will apply the same strategy used at the time when iPad Mini was released late last year having a price of $329, $170 less than the current large iPad.
In a report given by Huberty to Apple Insider, she said that Apple is expected to release the low-cost iPhone some time at the end of this year, interrupting the iPhone 4 and iPhone 4S.
According to Katy Huberty, most likely the price tag for the low-cost iPhone will be $399 considering that the supply chain items are almost the same to the existent iPhone series so it is expected for the new low-end iPhone to supersede the iPhone 4 and iPhone 4S series which were sold at a price of $ 450-$549 before getting any discount.
The normal iPhone costs $199 with a two year contract with the carrier of your choice. However, the unlocked version costs around $800 to $900.
According to rumours, Apple will release two iPhones this year - iPhone 6 and the budget iPhone 5S.
The next iPhone is rumoured to feature Retina or IGZO screen display, A7 quad core chip processor, iOS 7, 128GB internal storage, 13 mega-pixel camera, and longer battery life. The lack of NFC support on the iPhone 5 was one of the biggest criticisms aimed at Apple's smartphone.
Meanwhile, the cheaper iPhone 5S is rumoured to sport a plastic casing, 4-inch screen display, dual core processor and 8-megapixel camera. The smartphone is speculated to be available in five to six different colors.
Both Apple smartphones are rumoured to include a fingerprint sensor technology for added security. The rumour is strengthened by the report that Apple bought a fingerprint technology firm Authentec last year.
It is initially reported that the new iPhones will be launched in June along with the upgraded iOS. However, other reports stated that the devices will make its debut in September.
The Apple chief Tim Cook also dropped several hints that the upcoming iPhone 6 and 5S will be released later this year. Cook said that no new products are to launch before the end of the year.
However, In the D11 interview of Apple's chief Tim Cook subtly suggested that the company will not release a low cost iPhone or a phablet this year. Tim Cook stressed that Apple invests time and effort in making each phone that serves various markets rather than making a myriad of phones aim to serve specific users.
But if rumours proved to be and Apple will indeed release iPhone 5S and iPhone Light this year, previous rumour that iPhone 6 may come next year.
However, the Cupertino-based tech company did not give an official statement on the rumours surrounding iPhone 6 and iPhone 5S.