A cheapercould expand ’s addressable mobile phone market by 6x, according to Bernstein Research analyst Toni Sacconaghi .
Forbes reports that Sacconaghi’s analysis suggests the lower priced phone could result in 2.5x the revenue and allow Apple to capture 5% of the expanded 2011 market. He calculates that Apple would get an annual profit boost of $4.50 a share.
“Beyond helping address a potential saturation challenge, we believe that the possible introduction of a lower-priced iPhone is strategically important for Apple, and we are surprised the company hasn’t introduced a lower priced offering previously,” he writes in a research note. “We believe that Apple’s ultimate intention is to be the dominant smartphone vendor globally, and that the company has market share aspirations that are akin to its iPod business (rather that itsbusiness, where it faces a sticky Wintel platform.) Given these aspirations, we are surprised that Apple hasn’t moved sooner to introduce a lower priced offering that could help secure a more dominant installed base. After all, the smart phone world is a platform war, where first mover advantage and scale matter.”