Pssst! Wanna buy a cheap(er) iPhone?

Don’t care if your next  iPhone has retina display or that its case is made out of plastic instead of glass? And you’re rather not fork over nearly $700 for an unlocked, contract-free model?

Apple might soon have something just for you.

The  cheaper-iPhone rumor mill is (again) on fire, with several analysts reporting that Apple is on the verge of releasing a less expensive iPhone, as well as a refreshed iPhone 5S sometime this year.

First up is Amit Daryanani of RBC Capital Markets. In a note to investors, he said we can expect “multiple new phones” from the Cupertino tech giant between June and July. And one of those will be a more affordable but scaled-down iPhone. He writes that the phone will feature “plastic casing and no Retina display.” And in the process, he says, Apple could get a swift kick to its bottom line:

The low-end iPhone will have the same 4″ form factor as the iPhone 5 but will have plastic casing and no retina display… The product may have lower GMs than iPhone 5/5s but should be accretive to AAPL’s corporate GMs of 38%. Hence, we estimate this could contribute $22B in revenues and $5.00+ in EPS in CY14E, which suggests the product could be worth $50+ to AAPL’s stock price.

The global market for a more moderately priced iPhone is huge, he says:

Apple is going to capitalize on the low-end Smartphone market by launching a new phone that will address what we consider to be a ~500M total addressable market in CY14. In our view, AAPL should be able to quickly penetrate this market up to and beyond the 15% mark in the medium term (we estimate AAPL has 40%+ share in the premium market).

And he’s not alone in his prediction. Credit Suisse’s Kulbinder Garcha writes in a note to investors:

  “Our checks in conjunction with our Asian team point to Apple not only refreshing the iPhone 5 mid-year but also a specifically targeted low-end iPhone. We believe in aggregate this a positive as it can sustain top and bottom line growth (giving upside to our FY13/14 EPS of $44.92/$54.03), deal with the competitive ecosystem and volume threat from Android/Samsung and continue to drive growth in Apple’s installed base.



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