We’ve been hearing a number of stories in regards to the existence of a low-budget iPhone for months now. A number of analysts not only believe a budget iPhone does exist, but a number of them believe we could be seeing it debut as early as this summer. Another analyst is making some noise today saying a cheap iPhone launching this summer makes sense.

Morgan Stanley analyst Katy Huberty is convinced a low-budget iPhone is in Apple’s future after meeting with Apple’s CFO Peter Oppenheimer. She notes a number of reasons why a low-budget iPhone absolutely makes sense:

“1) iPad Mini is expanding Apple’s customer base with 50% of purchases in China/Brazil representing new customers to the ecosystem.

2) Chinese consumers show a desire to purchase the latest version of iPhone (instead of discounted older generations).

3) iPhone 4 demand surprised to the upside in the December quarter. Even at a low 40% gross margin and 1/3 cannibalization rate, we see an “iPhone Mini” as incremental to revenue and gross profit dollars.”

We’re not sure exactly what Oppenheimer said to Huberty that made her feel so confident as to the existence of a low-budget iPhone, but for a meeting to make her speak out in support of the new smartphone has certainly made things interesting.

Filed in Apple >Cellphones. Read more about iOS and iPhone.

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