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In a note to clients Piper Jaffray analyst Gene Munster predicts Apple will launch a cheaper smartphone within two years. To be more specific, an US$200, unsubsidized iPhone in 2014.
"Business Insider" (http://macte.ch/KbhTj) explains it this way: "In the U.S., if you buy a new iPhone 5 it costs $200 because the carrier is footing the majority of the bill for you. You pay $200, but Apple collects ~$600. That carrier covers that $400 gap, and hopes to make the money on your data￼ charges. That system doesn't work in places like India and China. And that's why Apple's market share is tiny in those countries. If it doesn't want to lose access to the next three billion smartphone￼ buyers, it needs to solve this problem."