Apple is on its way of designing and releasing a more affordable iPhone unit to widen its mass market, Seeking Alpha predicts. The said budget iPhone is a counterpart of the budget version of iPad Mini. Its price is predicted to be set at a little over $200 for Apple to stay consisted with its traditional brand differentiation strategy.

Analyst at SeekingAlpha.com believes that Apple will not sacrifice its trademark of being high-quality product even with its budget iPhone. Although it will likely put strict restrictions with its budget, it will not let go of its spot higher than its Android competitor. This move actually allows Apple to widen its market share in more years to come.

Seeking Alpha presented an analysis of four important reasons that could convince people that budget iPhone is indeed a smart shift from mobiles with higher price tags.

Four reasons as follow:

1. According to ABI Research, by 2017, budget smartphones will equal half of all smartphone shipments.

- According to data, 46 per cent of smartphone shipments at present are all budget priced smartphones. This percentage is 28 per cent higher this year.

- There is 259 million worth of budget smartphones to be ship in different outlets this year

- According to market prediction, the 259 million worth of budget smartphone will likely to increase to 788 million within 5 years

- Market analyst is seeing a big market potential to smartphones and if all goes as predicted, Apple will be able to sell its budget iPHone at an affordable price of $200 - $399

2. The idea that "cheap devices have never been Apple's strength is not correct. They may be so good at doing it that you do not realize they are actually "cheap" devices.

The predicted budget iPhone is likened to Apple's introduction of its budget iPod and iPad, the iPad Mini and iPod Nano. Both devices are cheaper considering the price of its mother gadget but people do not feel the difference in terms of quality. In fact, even those who already own iPod and iPad want an iPad Mini and iPod Nano.

As much as Apple wants to target a wider market, it still is cautious not to upset its loyal customers who are more than willing to pay higher for Apple products.

3. As long as Apple keeps its high-quality standards, the loyalty of traditional customers will not be damaged.

Apple is already a trademark of high-quality and people are more inclined to buy from the company than from its competitor. Like for example, the iPad Mini is priced at $329, higher than Nexus sold at $199 and Kindle Fire sold at $249. Yet, the iPad Mini still has the largest revenue among these mini tablets.

4. The budget iPhone could grab as much as 11% of low-end market in 2014.

Gene Munster of Piper Jaffray presented this possibility in two scenarios:

- Apple could corner 11 per cent of the low-end smartphone market in 2014, achieving 30 per cent gross margins with $300 device, 25 per cent less than the current gross margin the company enjoys from the existing iPhone models.

- In the worst case, a low-end iPhone could cannibalize 30 per cent of existing sales. But even if this were to happen, which is unlikely, the company's overall gross margins wouldn't be severely damaged.