People say that Apple should do an iPhone nano simply because they did an iPod nano (originally an iPod mini, obviously). And that the “iPhone nano” should be a stripped down / simplified version of the iPhone, as the iPod mini / nano was.

But, this is totally incorrect! The iPod mini had exactly the same features as the full-sized iPod. As did the iPod nano. There was no feature reduction. The current iPod nano actually has more features that the current iPod classic! The iPod mini was, essentially, the original iPod (the 5GB one) repackaged to make it smaller, whilst the full-sized iPod just gained capacity through using bigger drives. Who cares about that? That was just a technical necessity. Apple now use Flash storage for up to 30GB.

So, if Apple can make the iPhone smaller, why wouldn’t they? Also, the entire iPhone and iPod touch platform is based around that screen (viewport, in industry parlance).

The only iPod version that had a feature reduction was / is the iPod shuffle.

The “iPhone nano” should join FM radios and physical keyboards on the list of utterly absurd, uninformed rumours that just don’t add up.

Sorry, I don’t agree. The 3G dropped the initial price in half, and even though the monthly cost went up $15 (not $35) over the older equivalent plan, sales soared. It may be confusing — since the 3G is ultimately more expensive — but most people seem to focus more on the initial out-of-pocket than the monthly fee.

Mike,

I agree with you. 32GB need to come down in price and when they add that to the lineup Apple may cut the 8GB to $99. This is assuming, of course, that Apple wants that third SKU in the system, or even that they want a $99 iPhone at all right now.

Memory chip companies are currently manufacturing 32GB chips. The reason the iPhone has not gone to 32GB yet is it would take 2 16GB chips and it doesn’t have room (the iPod Touch does though). These chips are going to be ready Q1 2009. Apple will add a new sku for the 32GB iPhone and drop the price of the other two. They can afford to take the hit on the iphone margin to later recoup it in AT&T subsidies and contract sign-ups.

Apple cut the price in half (from $400 to $200) and sold ~6 million of them. Cutting it in half again may not sell that many, but it would bring in a lot more people. Lots of people are all about the initial outlay, not the monthly payment.

Joe,

What you’re talking about may be true; I think Apple will do some really cool stuff, too. But I don’t think it’d start at $99, which is the price point discussed in the article. What Apple could put together and sell for $99 brand new I think would either be a somewhat conventional phone (albeit with Apple style), or a lower-priced model of the existing phone. I think the latter could be useful while the former would not.