UPDATE: The big question about a streaming-only iPhone is apps: How will users download apps? My source compared it to the second-generation Apple TV, which is a streaming-only device but includes 8GB of onboard memory (for the OS and buffering media). “I’m not 100% sure on the amount of memory available for the user,” he said. “I know there is some memory but it acts more like the memory on the AppleTV. There is some there, I’m just not sure how much.”
We have more detail on Apple’s iPhone nano, which according to Sunday’s Wall Street Journal is real and may be headed to market this year.
This week, Bloomberg, The Wall Street Journal and TechCrunch all published rumors that Apple plans to compete in the mid-ranged smartphone sector, with the launch of a smaller, more affordable iPhone, to be sold alongside the iPhone 4. At Cult of Mac, we predicted as much six weeks ago.
Of course, rumors of a smaller, cheaper iPhone are nothing new. They’ve been around for almost as long as the iPhone itself. And with good reason. Any seasoned Apple watcher will recognize this as Steve Jobs’ standard MO. Launch an iconic, up-market product, allow the market for it to grow and mature, and when the underlying technology becomes cheap enough, introduce a smaller, more affordable mass market version.
We like the sound of this one: Apple is rumored to be working on a smaller, cheaper iPhone — the iPhone nano. Best of all, the $200 iPhone will be contract free and may be dual-mode.
According to Bloomberg, the new handset will be about one-third smaller and be based on older, cheaper components to keep the price down. Apple already has a prototype (more likely, prototypes) and plans to introduce the new iPhone mid year.
The new iPhone may also be dual-mode. Bloomberg says Apple is also working on a dual-mode GSM and CDMA handset that would work on almost all networks — this may or may not the iPhone 5, and may or may not be in the new, smaller iPhone. Would make sense if it was though.
The cheaper handset is to counter the relentless march of Android phones, which are beating iPhone market share (but not iOS market share).
Bloomberg has great sources and has a good track record with Apple rumors. If true, it’s huge. It would upend carrier subsidies and the whole wireless business, givung control back to consumers and device makers.
As we noted in our prediction piece, Apple is currently competing only at the high-end, and has nothing to counter Android at entry-level prices. We predicted Apple will introduce a cheaper iPhone this year to widen the “price umbrella.” We called the cheaper iPhone, the “iPhone play.”
Of course, the iPhone nano rumors are as old as the hills.