New rumours claimed that the low cost iPhone will cost $99 and there are reasons to back it up.

Tech giant Apple is expected to launch the budget smartphone that is widely referred to as the iPhone 5S. Reports claimed that the company has discussed a price of $99 for the cheaper phone, though this has not been finalized and the timing could still slip to next year, according to one of the people. Nevertheless, other sources say that trial production for the standard and cheaper iPhone model aims to start next month to meet a September launch target.

According to investment firm Goldman Sachs, "we continue to believe that Apple will introduce a refreshed iPhone and a low cost model this fall, the timing of which would coincide with the release of iOS which was introduced this week. We would be very encouraged with a larger-screen version of the iPhone, but since that is unlikely until deep into 2014, it is difficult to judge the success of such a product at this point."

The cheaper iPhone 5S is rumoured to sport a plastic casing, 4-inch screen display, dual core processor and 8-megapixel camera. The smartphone is speculated to be available in five to six different colors.

It is initially reported that the new iPhones will be launched in June along with the upgraded iOS. However, other reports stated that the devices will make its debut in September.

The Apple chief Tim Cook also dropped several hints that the upcoming iPhone 6 and 5S will be released later this year. Cook said that no new products are to launch before the end of the year.

However, the Cupertino-based tech company did not give an official statement on the rumours surrounding iPhone 6 and iPhone 5S.

Below are the reasons why Apple will release a $99 budget iPhone.

Downgraded Specs - Plastic casing, no Retina screen display and other lower features may be seen on the rumoured low cost iPhone 5S. With the alleged specs and features, this will yield to lower the price of device.

Intense Competition - Apple is under pressure to offer lower price and greater variety in a smartphone and tablet market where it faces increased competition from many rivals such as Samsung.

Increase in Sales - There is a report that claimed that Samsung overtook Apple in terms of market share and sales. Apple is pressured by its investors to increase the sales by releasing new products that consumers will buy.

Third World Markets - Analysts say the company especially needs cheaper products to compete in emerging markets like China and India. Budget mobile products targeted specifically at emerging markets, some not even being offered in the U.S. But there is no indication whether a cheaper plastic iPhone would be limited to these markets.