Bryan White of Topeka Capitol, in an investors note sent out Thursday, cited research suggesting a low-cost iPhone, likely to be tagged "iPhone Mini," would come in five different colors.
Four of the five colors could be white, black, pink, and blue, White told CNET.
He said the low-cost phone could arrive before the iPhone 5S, which is likely to be unveiled in September if Apple follows its usual schedule of product introductions.
The target market for a less-expensive iPhone would be developing markets where the traditional iPhone is seen as too pricey for the average consumer, White said.
Despite months of rampant rumors about a low-cost iPhone, Apple has kept to its policy of not discussing possible product developments, CNET said.