Apple set to launch smaller, cheaper iPhone alongside MobileMe revamp

Posted by Andru Edwards Categories: Apple, Smartphones, Rumors

Late last week Bloomberg reported that Apple was prepping a smaller, cheaper iPhone. Now the Wall Street Journal has chimed in, saying Apple is readying a device that's about half the size of the iPhone 4 for a summer release.

The new phone would be added to the existing line of iPhones and it would be about half the price, WSJ said. A 16GB iPhone on either Verizon or AT&T costs $199 with a two-year contract.

The Journal says according to "someone who saw a prototype of the phone late last year," the smaller iPhone is "significantly lighter than the iPhone 4 and has an edge-to-edge screen that could be manipulated by touch, as well as a virtual keyboard and voice-based navigation."

Apple is also planning an overhaul of MobileMe, its cloud-based storage service. The Journal said the company will ditch its one-year $99 subscription model in favor of a free service. MobileMe would "serve as a 'locker' for personal memorabilia such as photos, music, and videos."

If that proves true, that would theoretically take away the need to have a device with heaps of memory. It also could lead to iTunes in the cloud, a direction many have speculated Apple would go eventually based on the company's acquisition of cloud-music service Lala.

The WSJ said that cheaper iPhones and retooling MobileMe are of utmost importance to Apple CEO Steve Jobs. Although he went on hiatus for undisclosed medical reasons last month, he's still closely involved with these efforts, the report says.

Competition between Apple and Android has been heating up over the past several months. Recent data from comScore showed that Android overtook iOS to become the number two mobile platform in the U.S., but just by a hair. Android captured 26 percent of the market while Apple is close on its heels with a 25 percent share.

But take a look at these dueling platforms. Google's operating system is spread out across many different devices, while Apple's iOS is specific to a handful of Apple products. An additional iPhone with a lower price point could even out the playing field a bit.

Bloomberg also reported that Apple is working on dual-mode CDMA/GSM phones and a "universal SIM."

Apple has declined to comment on the matter.

This article, written by Leslie Horn, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc..