Steve Milunovich, an analyst from UBS, wrote in a note for investors about Apple's forthcoming low-cost iPhone. He said in 2014, the cheaper iPhone would outsell the company's latest flagship iOS smartphone.

Milunovich reiterated that the tech titan's share with a price target of U$500 is a buy. Nonetheless, he reduced the estimates for 2014. He said that the iPad and iPhone M would bring in a negative effect on the profits of Apple. Milunovich projected a US$179.9 billion and U$42.29 each share net income for next year. The figures were down from US$185.1 billion and US$43.46 each share net earnings this year. The analyst said Apple's gross margin is 36.6%.

According to Milunovich, the iPhone M would record a tremendous success for Apple.  He said Apple would be able to sell between 92 million to 99 million units in the company's fiscal year 2014. It would account for 53% of the total sales next year. Milunovich added that the iPhone M would be worth US$379. He further explained that if the company sold only 92 million iPhone Ms, Apple's earnings would shrink, whereas at 99 million units sold, "the gross profit impact would be neutral."