iPhone Mini Rumors: Low-Cost iPhone Could Add Billions in Revenue For Apple, Say Analysts

Many analysts believe that it would be beneficial for Apple to sell a low-cost iPhone, which could earn billions in revenue for the Cupertino-based company. 

Adding onto the ongoing list of analysts pitching their two cents on a low-cost iPhone, or iPhone Mini, is BTIG analyst Walter Piecyk.

In a note to investors, Piecyk raised his opinion on Apple stock to "buy" from "neutral" on the idea the low-cost iPhone will launch before the end of 2013.

According to the BTIG analyst, approximately 36.5 million units of the low-cost iPhone can be sold during the 2014 fiscal year if given an average non-subsidized price tag of $300. With such price, the low-cost iPhone could add $11 billion to Apple's revenue.

"As we have previously detailed, we believe a product that addresses the more than 70 percent of global wireless subscribers that are unsubsidized pre-paid is necessary in order for Apple to grow its EPS (earnings per share) next year," Piecyk said. "This is not rocket science and our belief is based on basic logic not questionable 'channel checks' or trips to Asia."

He added the idea of a low-cost Apple device is not farfetched, noting the iPad Mini and iPod Nano as examples.

"If the management team does not follow this basic logic, as we expect they will, investors will need to push for a new management team," said Piecyk. "At the moment they have earned the benefit of the doubt that they will go after this market."

Piecyk's note to investors follow Morgan Stanley analyst's Katy Huberty's note in late February of the low-cost iPhone.

"We believe Apple could launch iPhone Mini at $330 (about Rmb2,000), in-line with flagship products in China from Lenovo, Huawei, ZTE and Coolpad," wrote Huberty. "Even in a scenario of low 40 percent gross margin and 1/3 iPhone cannibalization rate (flattening legacy iPhone shipment growth), which we view as conservative, the iPhone Mini adds incremental revenue and gross profit dollars."

According to Piper Jaffray analyst Gene Munster, the low-cost iPhone could launch in September. He added, the cheaper iPhone could launch in the China and India markets and sell approximately 27 million total units by the end of 2013 and increase up to 96 million units sold by the end of 2014.