Piper Jaffray analyst, Gene Munster, has predicted that Apple Inc. could sell as many 75 million units of a low-cost iPhone in 2014, according to CNET.com.
According to a note released by investors, Munster projects Apple will sell a $300 non-subsidized iPhone beginning in September. The business move could produce a 30 percent cannibalization rate. For every three iPhones sold at $300, every full-priced iPhone will face cannibalization.
According to Investopedia.com, cannibalization occurs when a new product does not expand the company's market but infringes upon a product that already exists.
This means that people who used to buy one the full-price iPhone will now buy the low-cost iPhone.
The move could cause Apple to see a decline in shares for the high-end smartphone as much as six percent. Its high-end smartphone market share could drop from 43 percent to 37 percent.
However, there could be a bump in its share for the low-end smartphone market which consists of phones under $400. The rise would be as much as 11 percent-up from zero in 2012.
Munster also projects the iPhone will not see much sales growth in the second quarter. This translates to sales of approximately 26 million units.
Overall revenues in the second quarter for Apple would reach $35.1 billion. This is lower than Munster's original projection of $37.6 billion.
Rumors of a low-cost iPhone have picked up steam recently. It is believed that the new unsubsidized, iPhone could be sold at approximately $300, will be geared towards smaller markets that are currently growing-such as China.
Rumors of a new iPhone stirred up after a hiring freeze at Foxconn, a China-based electronics manufacturer that works with Apple, ceased. Sources say approximately 10,000 workers have been hired since the end of the hiring freeze.
BTIG analysts Walter Piecyk predicits the low-cost iPhone will debut the end of the year. Ming-Chi Kuo of KGI Securities says the new iPhone 5s and the low-cost phone will debut as early as July.
