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July 19, 2007 10:42 AM PDT

Buzz growing about scaled-down iPhone for the holidays

by Tom Krazit
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If you like the iPhone but can't swing the purchase price, you might not have to wait long for a cheaper alternative.

AppleInsider is reporting that Apple has a second iPhone in the works for later this year that won't be quite as capable as the one currently out in the wild, but that will cost less and resemble the iPod Nano. The site based its report on the word of "extremely reputable sources" that declined to be named, presumably for fear of losing their jobs.

A smaller, cheaper iPhone could be arriving later this year, according to a new report.

(Credit: CNET Networks)

This rumor cropped up last week with the back-and-forth between financial analysts from JPMorgan Chase in Taiwan and New York. Kevin Chang had issued a report similiar to the one posted by AppleInsider Thursday, claiming that Apple had a cheaper iPhone in the works that incorporated a number of new interface technologies, such as a touchscreen click-wheel similar to the iPod interface. But his colleagues in New York expressed skepticism at that notion, figuring that Apple would add technologies like 3G data networking before overhauling the user interface on a brand new product.

That still seems to make the most sense to me. Apple has said it will have an iPhone ready for the European market before the end of the year, and it would be pretty foolish to enter the European market--where faster cellular networks are prevalent--without a 3G phone. Such a handset could easily be tweaked for AT&T's U.S. network, giving prospective iPhone customers a faster option and a new model to promote during the holiday shopping season.

But price is still an obstacle to iPhone adoption, so a lower-cost model would also make sense. What is interesting--and confusing--about these reports, however, is the notion that Apple would introduce a new iPhone interface after having spent all that time and effort on commercials and videos demonstrating how to use the current iPhone interface. We'll have to see what else shakes out over the next couple of months.

Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple. E-mail Tom.
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Add a Comment (Log in or register) (6 Comments)
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It's a rumor that...
by JohnBarbagallo July 19, 2007 12:27 PM PDT
It's a rumor that the next "iPhone" is going to be like the iPod Nano was to the iPod line. That's not true. It was a stupid rumor that was circulating, while people used the patent schematics for the 3rd generation iPod. However, there most likely will be a new version of the iPhone coming out for the holidays. Apple would be stupid not to come out with a revised version...
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Why?
by TNCLR July 19, 2007 4:29 PM PDT
Explain to me why you think they need to come out with a new
version less than 6 months after it's initial release and no sign of
sagging sales? That is utterly ridiculous. I can *maybe* see a
version with more memory, if that.
iphone shuffle
by wpaven July 19, 2007 1:36 PM PDT
I'm waiting for the iphone shuffle to come out. Holds 10 numbers and you never know who you're dialing.
Reply to this comment
Funniest iPhone comment by far ...
by Rants&Raves July 19, 2007 10:53 PM PDT
... and I'm still chuckling. I love it.
Not likely
by dlowe402 July 19, 2007 6:12 PM PDT
Apple would be shooting themselves in the foot to come out
with any model that is better than the current iPhone 6 moths
after release. Think about it, tie up all your high end users for 6
months an then come out with something better. Steve is
smarter than that. No, I think it will be at least a year before we
see a better iPhone. The idea of a stripped down version is,
however, feasible. If Apple came out with just a Phone/iPod, to
get for the kids for Xmas...Brilliant idea! While Apple does
upgrade their computers often, they don't do it by leaps and
bounds every 6 months. An upgrade here, a speed bump
there...But not a big change. We will most likely see a smaller
version but it's not like Apple to come out with a new line and
make it completely inferior within such a short time.
Reply to this comment
Shooting themselves in the foot?
by DrDelos July 19, 2007 8:12 PM PDT
he funniest line I have read all day - 'Steve is
smarter than that.' He did it over an over in the past. Apple would come out with a new piece of hardware that only worked with new software that wouldn't work with old hardware. The old description that was revived when people discovered that the iPod had batteries that weren't designed to be replaced still stands: Apple makes disposable toys for yuppies that have to be first in their group with the newest gadget.

Apple will have to have new hardware soon to overcome the slow edge network, the 3G issue and the lack of GPS, but they will seek to pacify the early adopters with a software upgrade this fall. Apple is just a religion with jobs as the pope - no make that Jesus - no make that GOD. Logic, common sense and reality have no place in the mythology.
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