Is Apple Working on a Smaller, Cheaper iPhone?

Making things smaller and cheaper worked several times for the iPod — but will Apple do the same thing for the iPhone? Industry sources indicate we may soon see the equivalent of an iPhone Nano. Bloomberg cites several sources who say Apple is indeed developing a smaller, cheaper iPhone that can compete better with cheaper Android phones. The goal, reportedly, is to create an iPhone that will retail for around $200 without a subsidy from carrier networks. 

At first glance, this seems like something antithetical to Apple CEO Steve Jobs' design philosophy. And yet, it also makes some sense. Android handsets are getting cheaper all the time, and while the iPhone is continuously innovating and adding new features, many consumers (especially international consumers who often buy the phone unsubsidized) can't afford one.

A smaller, cheaper iPhone would mean losing some of the lauded features of the current iPhone 4, the first of which would likely be the ultra-high resolution Retina Display. However, the sources say the new iPhone would have some developments of its own, including a dual-mode chipset that would work on all networks (CDMA and GSM).

The smaller iPhone would also get rid of SIM cards altogether. Apple is reportedly working on "Universal SIM" technology that would eliminate the need for the tiny piece of plastic in GSM phones (AT&T and T-Mobile) that tracks user info. This would be an important feature in a dual-CDMA/GSM phone. TechNews Daily