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Apple could launch 'iPhone Mini' next year, analyst says

In its ongoing battle against Samsung, Apple may be forced to unveil a smaller, cheaper version of its flagship phone, says Strategy Analytics.

Will the iPhone get a baby brother?
Will the iPhone get a baby brother?

Is an "iPhone Mini" on the horizon? Strategy Analytics analyst Neil Mawston thinks so. But why?

Samsung has been the clear winner in the smartphone wars, with Apple playing second fiddle. And that lead may wider further in 2013.

Based on data sent to CNET, Mawston expects Samsung to carve out a 33 percent chunk of the smartphone market this year, up from a projected 31 percent in 2012. At the same time, Apple's share will inch up to 21 percent from 20 percent last year. Samsung could sell as many as 290 million smartphones this year, while Apple is likely to sell 180 million iPhones.

The Korean handset maker has the edge over Apple in large part because it "plays in more segments," Mawston told Reuters, allowing it to "capture more volume than Apple."

To fight back, Apple may try to win over a larger base of consumers by launching a smaller, cheaper variant of the iPhone, dubbed the "iPhone Mini" by the analyst.

With the iPhone 5 grabbing huge demand and sales, a low-end model may not be on Apple's agenda this year. But Mawston told CNET he thinks it's coming.

We believe Apple will have to launch an 'iPhone Mini' at some point over the next three years to address the hundreds of millions of prepaid users worldwide that cannot afford the current iPhone. The iPhone 5 is growing fast and profitably right now, so there is limited incentive for Apple to launch a profit-squeezing 'iPhone Mini' this year. We expect the 'iPhone Mini' to be more likely next year, in 2014, when Apple's penetration of the global postpaid smartphone market will be nearing saturation and Apple will be forced to discover fresh growth streams elsewhere.

Jefferies analyst Peter Misek also sees a low-cost iPhone in Apple's future but thinks it could launch early this summer at a price of $200 to $250. He cautions that a low-end iPhone hasn't gotten the go-ahead yet because Apple feels such a product would bite into gross margins.

Apple and Samsung will continue to battle over market share as they introduce new flagship phones for 2013.

Samsung is expected to launch the Galaxy S4 this year. One initial report said the new phone could reach consumers this February or March, but the company quickly downplayed those rumors.

Apple will have a new iPhone on tap, most likely a refresh of the iPhone 5. Though the iPhone 5 came out last September, some analysts believe the iPhone 5S could pop up around June.