If Not Nano, Then What? Apple Looks at Budget iPhone

The week started off with rumors that Apple was planning to “launch a smaller, more affordable iPhone – an iPhone Nano, if you will.” The rumors were largely a result of reports in Bloomberg and The Wall Street Journal, but now The New York Times has come along to squash them.

According to an article in today’s Times, “contrary to published reports, Apple is not currently developing a smaller iPhone, according to people briefed on Apple’s plans who requested anonymity because the plans are confidential.”

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The Times’ sources say there are a number of reasons that Apple is not looking to introduce a smaller version of the iPhone, not the least of which being that the smaller size wouldn’t necessarily result in a cheaper iPhone. The smaller size would also cause trouble for app developers, who have enjoyed uniformity of screen size across iPhones, as compared to Android developers who have to deal with a variety of devices.

The Time does say, however, that Apple is looking to lower the cost by using different components.

“Although the innards of the phone, including memory size or camera quality, could change to offer a less expensive model, the size of the device would not vary,” said the Times’ source, who has worked on multiple versions of the device.

What will the company do then?

Another senior Apple executive said during a private meeting recently that it did not make sense for the company to make multiple iPhone models, noting that Apple would stick with its practice of dropping the price of older models when it introduced a new one.

The iPhone 3GS is now available for $49 with a two-year contract that helps subsidize the price of the device in the United States.

As part of its effort to find new customers for the iPhone, Apple plans to make it easier to operate the device through voice commands, removing an obstacle for people who do not like using a virtual keyboard, said another person with knowledge of Apple’s plans.

So what does this all boil down to? iPhone Nano? Nope. But perhaps we’ll see a version of the iPhone with even less memory for a lower cost. An iPhone Cloud, if you will.

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