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Posted at 8:13 AM ET, 02/11/2011

Report: Apple to introduce cheaper iPhone

By Hayley Tsukayama

Apple may be working on a cheaper, smaller iPhone on track for a midyear release, according to a Thursday report from Bloomberg that offered a glimpse into what may be going on in the company's development labs.

The company has reportedly considered offering the new handset for $200 without a two-year contract, about the same as its lowest contract phone when subsidized by carriers AT&T and Verizon. That kind of move, Charlie Wolf, an analyst at Needham & Co. in New York, told Bloomberg, would let Apple drastically increase its target market for the iPhone.

The handset is reportedly about one-third smaller than the current iPhone and uses many of the same components. The lower price is possible because the costs of the components will drop as the technology ages.

The company may also launch a dual-core phone to work on both the international GSM network used by AT&T and the Verizon CDMA network.

Apple has not responded to other organizations' requests for comment.

All of that would be great news for Apple fans, though, as Bloomberg points out, many Apple concepts never make it to launch.

Do you think there's a market for a smaller, cheaper iPhone? Or are you experiencing iPhone overload?

By Hayley Tsukayama  | February 11, 2011; 8:13 AM ET
Categories:  Apple, Gadgets, Mobile  
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I think there might be a market for this. (I've often thought about an iPhone nano...) A less expensive, smaller device that isn't on a contract and could be used as a pay as you go phone could do very well. I think it also makes some sense for Apple. If, as Bloomberg reported they would use current components rather than the next generation components we expect in the iPhone 5 then they might increase their overall sales without cannibalizing their top end phone too much. As we've seen, there's tremendous demand for the newest iPhone. I think they could do well with this idea.

Posted by: ccbweb | February 11, 2011 10:54 AM | Report abuse

Definitely a market! There's a huge portion of the population that has no use for a large, heavy, "full" function phone in their pocket. Yet we would like more then the standard "free" piece of junk offered by services. Make it loud, visible in bright sunlight, give it a good battery and most of us would be happy. We know where we're going. We don't need a tiny computer and a hundred apps. We don't need a huge memory for music. We need a phone, an address book, access to our email and the web. We need to be able to see and hear under adverse conditions. Make us happy!

Posted by: lstrauss1 | February 11, 2011 11:45 AM | Report abuse

Don't forget that there is a huge mobile phone market outside the US and Western Europe! The iPhone is hot in China too, but most people haven't been able to get their hands on one due to cost or limited supply. I bet they could sell millions of units of a lower-cost model in China and other developing markets. Those countries might be the primary target of a cheaper, unlocked iPhone.

Posted by: bokamba | February 11, 2011 12:09 PM | Report abuse

That won't fix their walled garden, developer abuse, and outright censorship of free speech.

Hardware wise I'm sure other vendors will just continue to kick their butts. They have good propaganda, that's about all that saves them. The reality is their products are crap.

Posted by: Nymous | February 12, 2011 11:58 AM | Report abuse

The only problem with selling the iPhone in China is that the censors would have to argue with Apple to ease off, and they wouldn't want to. Who needs a great firewall when you've got Apple to do the job for you.

Posted by: Nymous | February 12, 2011 12:01 PM | Report abuse

As much as I'm interested in an iPhone, I won't get one until Apple sells an unlocked GSM version that I can use anywhere and with any carrier. Until then, my Android phone suits me fine. I can wait.

Posted by: jmichaelharris1959 | February 12, 2011 3:15 PM | Report abuse

Much as I like my iPod Touch, a.k.a. the iPhone minus the phone, I got a Blackberry Style largely because I wanted something with a real keyboard I could stick in my pocket. I don't see how Apple could make a smaller iPhone with a remotely functional virtual keyboard. Maybe it could copy the Style and make a flip phone, but where the bottom part of the flip phone has a virtual rather than real keyboard.

Posted by: tjb1 | February 12, 2011 3:54 PM | Report abuse

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