In a research report published Tuesday, Morgan Stanley argued that smartphone pricing and the growing share of 3G users have ripened the market for a lower priced iPhone.
The sweet spot is $330 and analysts believe the new phone could offset the flattening growth of legacy iPhones.
Legacy devices, the iPhone 4 and 4S, still seem to be doing quite well in most markets. However, looking ahead Apple will need something new, since the 4-series is simply getting too old.