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.