Low-Cost iPhone Features Rumors: 4-inch Smartphone to Have Low-Grade Processor, Says Analyst

A low-cost iPhone may soon launch, however, its main focus might not be in the United States.

While appearing on Bloomberg TV, Jefferies & Co. analyst Peter Misek stated that the rumors of a low-cost iPhone will come true. As for the features of this low-budget Apple smartphone, Misek noted the device will have a 4-inch screen while other components will be savings for the Cupertino-based company, basically meaning it'll be cheap to construct.

According to Misek, the main-cost savings will likely come from a lower NAND memory count and low-grade processor.

As for carriers, the low-budget iPhone is expected to come to China Mobile and other overseas markets.

The idea of releasing the low-cost iPhone was reiterated last week in a report by Reuters. Suppliers from Pegatron Corp, which have assembled components for the iPad and iPhone, further stated Apple is developing a cheaper version of the iPhone and would broaden its base to low-income customers largely in China and India.

"Making the cheaper iPhone will further help Pegatron's operating margin because its plastic casing is easier to make than iPhone 5's metal casing; this should ensure a good yield rate," Fubon Securities analyst Arthur Liao told Reuters.

Releasing a low-cost iPhone in China and India is a sentiment shared by Morgan Stanley analyst Katy Huberty a couple months ago.

"We believe Apple could launch iPhone Mini at $330 in-line with flagship products in China from Lenovo, Huawei, ZTE and Coolpad," stated Huberty.

For more on the latest iPhone 5S rumors, click here.