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A cheaper, smaller iPhone?
Rumor has it that a dimunitive iPhone Nano is in development, and many tech commentators are eager to believe the hype
 
According to one report, the rumored iPhone Nano would be half the size of the Apple iPhone 4 (pictured).
According to one report, the rumored iPhone Nano would be half the size of the Apple iPhone 4 (pictured).
Corbis

It's long been rumored that a cheaper, smaller version of the iPhone is on the horizon, but now both The Wall Street Journal and Bloomberg are offering up fresh intelligence on the so-called iPhone Nano, which could be half the size of the iPhone 4 and far more affordable. "And some people thought this may be a relatively dull year for Apple rumors…" says MG Siegler at TechCrunch. Here, a brief guide to the rumored phone:

Just how small is it?
Reports vary. "People familiar with the matter" who are cited by The Wall Street Journal say the cheaper iPhones would be about half the size of the iPhone 4, with an "edge-to-edge'" touchscreen, voice-based navigation and a virtual keyboard. Meanwhile, Bloomberg quotes a source who claims to have seen a prototype of the mystery phone and says it is 33 percent smaller than the iPhone 4 and has no "home button." The smaller size is workable because the new phone would rely on cloud computing to store media, according to Cult of Mac.

How much would it cost?
The new phone would be sold to carriers for about half the price of the standard iPhone, according to The Wall Street Journal. Mobile companies currently pay an average of $625 for iPhones, and sell them to consumers starting at $199, making their money from a minimum two-year service contract. According to Bloomberg, Apple is considering selling the new phone to consumers for around $200 — but without the contract requirement.

How reliable are these rumors?
Though a cheaper, more modest iPhone is a possibility, says Graham Bower at Cult of Mac, it "seems unlikely" that the new phone would be smaller, given the likely difficulty of use and production costs. If anything, "a cheaper iPhone [would] be larger than the iPhone 4." Jared Newman at PC World has similar "doubts": I don't see how Apple could reduce the cost so drastically, but if Bloomberg's report is accurate, "it'll be huge." 

What's Apple's motivation?
If Apple could make the phone affordable without locking consumers into a contract, it "would be potentially huge," agrees Siegler at TechCrunch. Apple and consumers would no longer be "slaves" to cell phone carriers. And, it could help Apple greatly expand its market share, both domestically and in China and India.

When might it come out?
According to a Bloomberg source, Apple tentatively plans to unveil the new phone in the middle of this year... but, at this point, anything could happen. Or not.

Sources: Wall Street Journal, Bloomberg, Cult of Mac (2), TechCrunch

 

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