iPhone 6, iPhone 5S Low Cost Model to Be a Mid-End Device

Apple's upcoming low-cost iPhone 5S or iPhone 6 will be a mid-end device, according to a new report.

J.P. Morgan analysts Gokul Hariharan and Mark Moskowitz recently spoke to AllThingsD about the low-cost model and stated that Apple will not use lower end components to build this new iPhone. Instead, Apple will take a different approach creating a mid-range device that is a bit cheaper than the regular iPhone.

The analysts stated that Apple's approach with this iPhone will be similer to its iPad Mini release as the company used older components that were top-of-the-line just one year prior to create a lower-cost device that could compete in that market. The iPad Mini also costs more than some of its fiercest competitors such as the Google Nexus 7 and Amazon Kindle Fire HD and still manages to sell really well.

Hariharan and Moskowitz predict that the low-cost iPhone will cost between $350 and $400 without a contract. The iPhone normally starts at $650, making this other version $250 cheaper. On contract it might either end up being free or costing in between $50 and $100.

Samsung currently dominates the low-cost smartphone market and Apple has the potential to take 20-25 percent of its share in the next 12 months if the company prices its device in between $350 and $400, according to the analysts.

Apple's low-cost iPhone will be specifically targeted at emerging markets, according to another report released from DigiTimes last week. The publication claims that the Apple will launch the device in limited volumes in order to gauge interest. Apple is expected to deliver only 2.5-3 million units during its first quarter of availability.

Apple will also release the successor to the iPhone 5 later on this year.