And Now the iPhone Nano Rumors Return

By  |  Thursday, February 10, 2011 at 5:12 pm

Yesterday brought speculation that the iPod Classic was either dead or due for a refresh. Now, Bloomberg dusts off another classic Apple rumor: The iPhone Nano is coming.

Okay, Bloomberg doesn’t actually call it the “iPhone Nano.” But the reporters’ unnamed sources, who were reportedly “briefed on the plans,” say that Apple intends to release a smaller, cheaper iPhone in hopes of slowing Android’s growth.

Wait a minute. Apple already sells a cheaper iPhone, the 8 GB iPhone 3GS. A few weeks ago, Apple permanently dropped the price to $49 making it the least expensive iPhone yet. But Bloomberg suggests that the mini-iPhone will be even cheaper, selling for $200 without a carrier contract.

Before we dig into that claim, here’s a brief history of iPhone Nano rumors: Weeks after the original iPhone went on sale, JP Morgan analyst Kevin Chang said Apple would release an iPhone that resembled the iPod Nano, citing people in the supply channel. The Daily Mail followed up in August 2008, with a similar (read: silly) claim that the smaller iPhone would have a scroll wheel on the back. iDealsChina offered more scuttlebutt later that year, but without specifics. And in January 2009, Taiwan’s Economic Daily News reported that a pair of electronics manufacturers were close to winning iPhone Nano chip contracts. Obviously, none of those reports resulted in an iPhone smaller than the one Apple releases every summer.

Anyway, the interesting thing about Bloomberg’s report is not that Apple is reportedly considering a smaller iPhone, but that Apple could make an iPhone cheap enough to bypass the carrier subsidy business model that is pervasive in the United States.

I have my doubts; Apple makes big profits by selling phones for $600 and relying on carriers to foot most of the bill. Then again, Apple’s Verizon iPhone 4 contains a new chip that can theoretically run on CDMA (Verizon, Sprint) and GSM (AT&T, T-Mobile) networks. Maybe Apple thinks it can sell a lot more phones by giving people the freedom to move between carriers.

It all seems a little lofty to me, but if the iPhone Nano happens as Bloomberg describes it, it’ll be huge.



6 Comments For This Post

  1. Hamranhansenhansen Says:

    Those iPhone nano rumors were probably just the new iPod nano. But adding a phone to the new iPod nano would be pretty straightforward.

  2. Bouke Timbermont Says:

    I want a cheaper contract-free iPhone. Especially in Europe, where simlocked phones and subsidising is a lot less common than in the US, this is what customers are waiting for. If Apple is doing this though they have to make sure it stays a true smartphone: compatible with all the AppStore apps, having both Wifi and 3G. Otherwise there is no reason to get this cheaper iPhone while there are excellent phones like the HTC Wildfire around which offer a full smartphone experience for €250 or less.

    (This difference between the US and the EU is why Nokia was so popular here: they deliver cheap phones with a great value. Now smartphones are getting more popular though, Androidphones are winning in Europe since there are a lot of great sub-300€ models. Nokia has never been strong in the smartphone segment and that's why they are currently losing marketshare so fast)

  3. Devin Says:

    Maybe I'm not fully understanding this, but why would someone want a "nano" sized version of the iPhone? I know it will be bigger than the current iPod Nano, but what would be the point? You would have a small screen and any "apps" that run on it would be pointless. At best it would just be a combination of an MP3 player and a phone, which a lot of other phones already do quite well.

    Am I missing something?

  4. Paul Says:

    I doubt that Apple would do this – in the US at least, there aren't too many people that interested in buying unlocked phones – cost tends to be prohibitive yes, but there isn't really much demand to move between carriers – that doesn't happen too much as it is since most phones sold require contracts. Most carrier jumping involves people breaking contract and paying ETF's.

    The fact is, I would bet that most people who even buy unlocked or non contract devices are going to stick with one carrier. John Grueber points outs that most people are paying bigger costs on the plans – something that doesn't have all that much difference in price on the low end no matter who you go with. Of course no carrier is going to drastically cut prices and subsidize phones either.

    Consumers are interested in cheap phones. Not in carrier freedom.

  5. SirFatty Says:

    Just because the rumored phones did not make it into production does not mean they did not exist within Apple. The sources could have been right, the product just never materialized.

  6. steve mandzik Says:

    This is what happens when Apple skips one of their keynotes! We go crazy with silly rumors!!

    I guess they just skipped the normal jan event due to Steve's illness?

    Steve – 1×57