By Chris Ciaccia

Apple (AAPL) investors, fanboys, and zealots: Be prepared for a low-end iPhone. At least that is what one analyst thinks.

Credit Suisse analyst Kulbinder Garcha believes Apple is getting ready to announce a lower-end iPhone for a few reasons.

He believes Apple will not only update the iPhone 5 later this year (see TheStreet), but Apple will also announce a low-end iPhone, which will not only help Apple increase its market share but profit share as well. Garcha, who recently cut his earnings estimates (TheStreet), rates Apple "outperform" with a $600 price target.

There's been much speculation not only from Wall Street, but the media as well about Apple and a lower-end iPhone. There's concern that it would dilute Apple's brand, but CEO Tim Cook tried to assuage these concerns, saying Apple would never release a bad product.

"The only thing we'll never do is make a crappy product," Cook said at a Goldman Sachs conference in February. "We're going to make a great product. And so that's the only religion that we have is we must do something great, something bold, something ambitious."

Even if Apple does make a lower-end iPhone, it would not be that dilutive to the brand, Garcha notes, and could have higher margins than people think. He pegs the price of a lower-end iPhone at $329, with 38% gross margins. That's lower than the gross margins Apple gets on the current version of the iPhone, but it would be in line with Apple's margins overall.

A lower-end iPhone would not just be good for market share, but could provide as much as $21 billion in revenue and $5 per share in earnings by 2015. "Assuming Apple introduces a $329 iPhone in 2014 and starts to gain share in these lower price bands, we believe it could capture 40% share in the $300-$400 market," Garcha notes.

Shares of Apple were lower in early morning trading, down 0.73% to $451.18.

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