An “iPhone for the masses” may become a reality, according to noted Piper Jaffray analyst Gene Munster. In a report issued to investors on Monday, Munster said the growth of the smartphone market and the iPhone itself has made it inevitable that Apple Inc. (NASDAQ:AAPL) will build a less expensive iPhone so that more consumers can afford it. In fact he said he believes the company “needs to develop an iPhone for the masses.”

iPhone 5 sales

Munster said the smartphone market increased 45 percent year over year during the third quarter. For the current quarter he is calling for iPhone sales of about 45 million units, which is only a 23 percent growth year over year. He uses Apple Inc. (NASDAQ:AAPL)’s history of Mac and iPad sales as a reason he thinks an iPhone for the masses will become a reality. “Looking back historically,” Munster wrote, “Apple always priced Macs as the higher end of the market and ultimately the iPad, and now the iPad Mini, became the ‘Mac for the masses.’”

He said there are two ways Apple Inc. (NASDAQ:AAPL) could go about making its iPhone less expensive. It could simply reduce the price of the phone, which would decrease its profit margin, or it could make some minor changes like offering less expensive versions that don’t have a Retina display and use less expensive and less powerful components. Whichever route Apple Inc. (NASDAQ:AAPL) decides to take, Munster expects a less expensive iPhone to be available by 2014 or sooner.

Munster rates shares of Apple Inc. (NASDAQ:AAPL) as Overweight and has set his target price at $900.