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Apple May Launch Cheaper $349 iPhone 5 Says Analyst

Apple may find the option of penetrating the mainstream segment now with a cheaper iPhone 5 compelling, as two of its biggest rivals, RIM and Nokia, are finding life difficult in the mid-range market.

This is, in essence, what an analyst for Deutsche Bank, Chris Whitmore (as reported by Fortune magazine), told his clients in a research note. He backed the idea that Apple may mount an assault with two phones rather than one.

Whitmore is adamant that an iPhone 5 and an iPhone 4S will hit the market. "With Nokia and RIMM struggling," he notes, "the time is right for Apple to aggressively penetrate the mid range smart-phone market (i.e. $300-500 category) to dramatically expand its [total addressable market] and market share."

He also reckons that an unlocked iPhone 4S with a selling price of $349 would potentially have an "addressable" market of around 1.5 billion customers in nearly 100 countries, with the overwhelming majority preferring to embrace PAYG plans rather than lengthy contracts.

In Europe and the UK, the market for prepaid smartphones is huge, accounting for just over 50 per cent according to Deutsche Bank, six times more than the mobile market in North America.

A $349 iPhone 4S phone would translate into a sub £300 handset and would be a potent rival to current Android handsets.