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Summary:

Apple is working on a smaller, cheaper iPhone, according to a report by Bloomberg. Also in development is an iPhone model that would be easy to use on multiple wireless networks, according to unidentified sources, like the one we speculated might exist on Monday.

smaller-iphone

Apple is working on a smaller, cheaper iPhone, according to a report by Bloomberg. Also in development is an iPhone model that would be easier to use on wireless networks from different carriers, according to unidentified sources, like the one we speculated might exist on Monday.

Bloomberg’s sources are light on details, but the smaller, cheaper iPhone is said to be about 30 percent smaller than the iPhone 4, and is on track for a mid-2011 release, though that timeline could be “delayed or scrapped.” The source apparently got eyes on the new device sometime last year, which uses technology found in the current iPhone to keep costs down. If and when such a smaller iPhone model hits the market, those components will be older and cheaper than those used in the construction of Apple’s iPhone 4 successor. Using older components will help Apple offer the device for the low price of around $200 off-contract, which could pave the way for carriers to offer the alternate iPhone for free with contract subsidies.

Separate unnamed individuals talking to Bloomberg revealed that Apple is also working on a dual-mode iPhone that would be able to work with both GSM (like that used by AT&T) and CDMA (like the one used by Verizon) networks. As we suggested, network cross-compatibility would be made even easier thanks to the presence of a universal, built-in SIM, and updated iPhone software that would allow customers to switch networks and configure devices to work on those networks themselves, without the need for Apple or carrier staff assistance. Whether this tech would make it into the small, cheap iPhone models isn’t known.

While this isn’t the first time rumors of a “mini” or smaller iPhone have circulated, it is the first time it’s happened since the rise of Google’s Android mobile operating system, which is challenging Apple’s footing in the smartphone market. If Apple can do a cheap phone well, it’ll do a lot to help counter Android’s recent gains, some of which are coming from low-priced handsets as inexpensive as $149 without subsidy.

The Bloomberg report also has a lot of the hallmarks of an intentional leak. It’s written by two authors, doesn’t reveal anything too specific, and even builds in easy deniability (suggesting that the release could be delayed or cancelled entirely). I’d argue that it’s almost a certainty Apple’s working on such a device, and that this is an intentional float to gauge public interest. If that’s indeed the case, color me interested.

Related content from GigaOM Pro (subscription req’d):

  1. [...] Bloomberg article also discussed a smaller and cheaper iPhone as another project at Cupertino –Bloomberg says it could cost about $200 as compared to the [...]

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  2. The second part of the story–that Apple is moving to a dual-mode wireless platform–has pretty much been confirmed. The iPhone 4 that Apple is supplying to Verizon uses Qualcomm’s CDMA baseband chipset, and Qualcomm has a multi-mode chipset. Ars Technica reported that Apple was planning to move to this chipset for the next iPhone last September (http://arstechnica.com/apple/news/2010/09/rumor-apple-to-ditch-infineon-for-qualcomm-in-iphone-5.ars).

    Implementing a multi-mode design would allow Apple to purchase a single baseband chipset for all its phones, and the cost savings might make a cheaper iPhone more practical.

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  3. Sorry, smaller iPhone makes no sense. Apple will continue to just make older models cheaper. A bigger ihpne, I could see that

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  4. TOO MANY CHOICES IS A BAD THING

    One of the reasons I like Apple is that Apple provides fewer options (e.g., 2 models of the iPhone) which makes decision-making easy – for example, choose option 1 or 2 or 3 (3 = buy nothing!).

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  5. [...] week, the Wall Street Journal is weighing-in with a report that Apple is gearing-up to produce a smaller, cheaper iPhone and introduce a revamped MobileMe this [...]

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  6. They need to do something to protect the mid-range-moving-up strategy of Android. Format-factor innovation (as in iPad killing-off netbooks) and/or changes in UI/functionality (iPod nano vs. iPod-classic) could be it.
    More… http://myperfectstartup.com/2011/02/14/mid-and-mass-market-smart-phones

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