Barclays Analyst Predicts Apple Ultra-Portable, Entry-Level iPhone

It seems everyone is lowering their sights regarding Apple’s projected earning for next financial year. But some, at least, are predicting more “wow” factor to shore up those numbers.

No one seems to think they can sustain the kind of numbers they showed this past year, especially regarding iPhone sales, since analysts see the device’s massive success to date as leaving less room for new customer growth in the future. Many customers will probably stick it out for the duration of their contracts before considering a hardware upgrade.

Barclays Capital analyst Ben Reitzes is the latest to cut projections for the Cupertino-based tech company. Reitzes lowered his EPS (earnings per share) estimate for FY 2009 to $4.95, lower than his initial projection of $5. FY 2008 numbers had the EPS at $5.36.

Reduced earning predictions are based on a tough consumer market and lower growth opportunity, although Reitzes offers intriguing predictions regarding hardware introductions that could help the company pick up some customers in new demographics and niche markets.

He believes the gap between the $399 iPhone and $999 MacBook is just clamoring for a bridge product, and Barclays is putting their money on a touch-capable ultra-portable form factor. This will not, however, be a netbook. Steve Jobs has said that Apple doesn’t know how to make something of quality at that price point, and they won’t. They’ll go more up-market, producing a premium device in the $600 range, instead of joining in the race for the bottom.

According to Reitzes, the device would be perfectly positioned for partnerships with wireless carriers, a possibility we reported earlier. He also mentions more MobileMe integration, and it’s true that a cloud computing device with multiple-band connectivity would be a match made in heaven for wireless broadband providers.

The Barclays report also introduces the interesting possibility of a cheaper, entry-level iPhone to appeal to non-smartphone cellular customers. Though they don’t specify, it’s possible this could be a media-phone instead of a smartphone, emphasizing music and movie playback and forgoing the bells and whistles of the App Store for those who wouldn’t make much use of it anyway. This last prediction, while possible, doesn’t seem like it will be a priority for Apple, considering today’s news that the iPhone has unseated the RAZR as the most popular U.S. mobile handset.

Personally, the possibility of an ultra-portable is far more tantalising than a netbook. If I buy an Apple computer, I want it to be a proper computer, not just a mobile web browser and chat client. Do you think an Apple UMPC is more likely than an Apple netbook? Which do you think is more useful/appealing?