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Apple Inc. (NASDAQ:AAPL) to introduce an updated iPhone 5? That has been the constant speculation of many analysts. Another expectation of many analysts is a launch by Apple Inc. (NASDAQ:AAPL) of a low priced iPhone. Two firms are out with new reports on the topic.

Canaccord Genuity believes that Apple is working on new iPhone products potentially for both the low-end and high-end markets, based on their analysis of near-term demand trends for component suppliers into the iPhone and post meetings at MWC, Apple is likely launch a refreshed iPhone 5 around August or during Q4/F2013. IPhone 5S is expected to come with improved hardware and potentially a larger screen , however, Apple intends to focus on unique software and services to differentiate the iPhone 5S according to Canaccord Genuity.

Credit Suisse (CS) channel checks in conjunction with the CS Asian team point to Apple not only refreshing the iPhone 5 mid-year but also a specifically targeted low-end iPhone. CS believes that in aggregate this a positive as it can sustain top and bottom line growth (providing upside to their FY13/14 EPS of $44.92/$54.03), deal with the competitive ecosystem and volume threat from Android/Samsung and continue to drive growth in Apple’s installed base.

How much money could Apple make from a cheap iPhone? Credit Suisse believes that Apple can make a lot of money. Based upon a teardown analysis, lower priced phones could have margins lower than the current iPhone but in line with corporate gross margins at 38 percent. At $329 retail ASP, CS believes a low end iPhone (3G device, 8GB of memory and same form factor as the iPhone 5) would be competitive versus rival products.

Assuming Apple introduces a $329 iPhone in 2014 and starts to gain share in these lower price bands, CS believes it could capture 40% share in the $300-$400 market. In turn, this can add incremental revenues of $16bn/$21bn in 2014/2015 and EPS of $3.13/$5.05 even allowing for cannibalization of the existing iPhone,