Will Apple Surprise With Cheaper iPhone?

What's next from Apple? Building on the phenomenal success of the iPhone, including the recent expansion to a second carrier, Verizon, in the U.S., Apple (NASDAQ: APPL) is developing a lower cost iPhone, according to a report by the Bloomberg news service.

The new iPhone would sell for about $200 without requiring the usual two-year contract, according to the report. Apple didn't respond to a request for comment.

According to the report the new iPhone could be introduced by mid-year or be scrapped altogether. Quoting sources it said had seen prototypes, Bloomberg said the new iPhone is about a third smaller than the current iPhone 4 and had no "home" button.

While a faster new processor and other advanced components are likely to appear in a new iPhone later this year, the low-end model would use the same chip and other components found in the current line.

Separately, another development that could be related to the low cost iPhone release is word that Apple is working on a so-called dual-mode phone that would work with both the GMS and CDMA wireless standards used by AT&T and Verizon respectively. Bloomberg said Apple is working on a universal SIM which would let iPhone users pick from a variety of GSM networks without having to switch the SIM cards that associate a phone with a specific network. A built-in, universal SIM capability would cut the cost of distributing and managing millions of SIM cards.

An iPhone less tied to a specific carrier would be welcome by enterprise customers, according to Mort Rosenthal, CEO of Enterprise Mobile, a mobile services company.

"Enterprises have always had a desire to separate the acquisition of the service from the acquisition of the device, but the carriers like having that stickiness," Rosenthal told InternetNews.com. ,

"Very few people probably know what Apple's really up to," continued Rosenthal. "But no one could play the unsubsidized card better than Apple with the power it has in delivery and distribution and a great device that rates high in customer satisfaction in an industry not known for high ratings."

Although Apple CEO Steve Jobs recently went on medical leave, he is still involved in strategic decision making and was recently spotted on Apple's campus, according to a report in the Wall Street Journal.

The other hot Apple-related rumor making the rounds is that the company is prepping a new version of the iPad that could appear by the one year anniversary of the original iPad this April.

David Needle is the West Coast bureau chief at InternetNews.com, the news service of Internet.com, the network for technology professionals.


mobile, iPhone, Apple, smartphone, Verizon