Apple may release its new iPhone—dubbed the iPhone 5S—in two, maybe three, screen sizes, analyst Brian White said in a note to clients Tuesday.
"Essentially, we believe Apple is coming around to the fact that one size per iPhone release does not work for everyone and offering consumers an option has the potential to expand the Company's market share," the analyst for Topeka Capital Markets wrote.
White, who has a buy rating on the stock with a price target of $888, said his firm sees Apple having a July launch of the new devices and anticipates that the company will reveal a lower cost iPhone as part of the release. But consumers expecting a new iPhone for a price of $150 to $200 will be disappointed, White said.
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"Apple's low cost iPhone will price at about $300 to $350, the firm believes. We believe this price point is reassuring for investors that Apple wants to expand its market reach with consumers in developing countries such as China; however, the Company will also manage its margin profile and brand appropriately," White said in his note.
Topeka Capital Markets' insights in its note are based on information gathered during a recent trip to tech supply chain companies in China and Taiwan.
Apple has been under pressure by shareholders for yet revealing a plan for its $137 billion cash load. It's stock has fallen to around $426 per share, a significant drop from its all-time high in September of $705.
White, however, said that there are three phases Apple must go through before the stock makes a comeback.
First, he said, Apple must tap into its cash hoard to attract more value investors and secure its stock. Then a bottom must form for its EPS and operating profit cycle. Finally, the company must make moves in new growth opportunities, including the "iTV" and "iWatch."
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