Carriers in most emerging markets, China being at the top of the list, are resistant to paying Apple the large subsidies for the top-of-the-line iPhone -- which comes with a suggested retail price starting at $650 -- and so a cheaper model would presumably be more likely to sell well in those locales.
Singh also outlined other problems at Apple that bother analysts, especially those on Wall Street, including recent talk of major cuts in iPhone 5 component orders and the now-established pattern where Apple sells massive numbers of a new model in the first quarter or two after introduction, but with dramatic decreases after that.
A less-expensive iPhone may explain those rumors and help Apple address its up-and-down sales pattern, which seems to have had a major impact on its stock price.
The component cuts could be due, Singh said, to Apple shifting to a more frequent release schedule where it launches a new iPhone two or more times a year. "An iPhone refresh ahead of schedule doesn't make much sense unless they move to a semi-annual release schedule," he noted. "In that case, a cheaper iPhone launch later in the year would make sense."
With a cheaper iPhone in its portfolio, Apple would have two smartphone lines -- the flagship iPhone and the less-capable iPhone Mini -- and could spread out new model launches to alleviate the boom-bust cycle.
"iPhones sales have become increasingly concentrated in the launch quarter, partly attributed to Apple's marketing prowess as well," Singh said. "The only way to really solve this is to move to a release cycle that's a little more spread out. And if Apple is planning on multiple releases, it makes sense to make a cheaper iPhone."
While Singh acknowledged he has no information to support his theories, he speculated that if Apple does decide on a less-expensive iPhone, the company would launch the device in the fall, after it refreshes the iPhone 5 with a new high-priced model labeled "iPhone 5S" or even "iPhone 6."
A cheaper iPhone would also give Apple an instantly-available fallback position if, as some have predicted, carriers eventually revolt against high subsidies. In the U.S., for instance, T-Mobile plans to start selling the iPhone this year, but will not subsidize the device. Instead, T-Mobile will tempt buyers with no-contract, unlimited data plans. If that carrier's experiment works, others will follow, analysts have said.
"If they do go ahead with a cheaper iPhone, I think they'll view it as a hedge against subsidy disruption, as opposed to responding to an immediate threat," said Singh.
Apple will hold its quarterly earnings call with Wall Street analysts next week, on Jan. 23, and while questions about its future plans, including a less-expensive iPhone may be asked, it's very unlikely that Apple will break with policy and reveal anything.
Sign up for CIO Asia eNewsletters.