JPMorgan analysts disagree on future iPhones

NEW YORK (Reuters) - Clients of JPMorgan Chase could be excused for feeling dizzy in the last few days after reading the banking group's investment research on Apple.

Kevin Chang, an analyst covering telecom equipment for JPMorgan (JPM.N) in Taiwan, issued a report on July 8 saying Apple may introduce a phone in the fourth quarter that is inspired by the design of its ultra-slim nano music players and is half as expensive as its $600 (300 pound) iPhone, launched on June 29.

But a day later, Bill Shope, a U.S. analyst who covers Apple for JPMorgan, followed with a note to clients that contradicted virtually everything his colleague had said and questioned the sources Chang used for his take on Apple product plans.

Rather than bring out a low-end version of the iPhone any time soon, Shope said, Apple would likely make its next phone a more sophisticated device with high-speed cellular Internet connections, a feature missing from the current iPhone.

Asked about the conflicting reports, Brian Marchiony, a U.S. spokesman for JPMorgan, said Shope "holds JPMorgan's official view of Apple's stock."

Chang declined comment.

On Tuesday, Apple (AAPL.O) shares rose as much as 3.2 percent following the report. The stock closed 0.03 percent higher at US$132.39 on Wednesday, underperforming the U.S. Dow Jones index's .DJI 0.56 percent rise.

While Shope said the eventual introduction of a cheaper iPhone is "inevitable," he described the prospects for a near-term launch as "unusual and highly risky." He also dismissed Chang's assertion that Apple could convert its nanos to phones.

"We struggle to understand why Apple would abandon one of its most successful product lines with a carrier-centric low-end phone," Shope said.