Analyst: iPhone mini could increase Apple's market reach by 6X, revenue 2.5X

To those claiming that Apple MUST do this to compete with Android, no they don't.

And they likely aren't. The iphone is already pretty small in form factor, a smaller one doesn't make UI sense.

This 'cheaper' phone is likely just a continuation of their practice of keeping one model in 'last years' form. The iphone 5 is likely just the same as a 4 but with slightly better camera, processor etc. just like with the 3g to the 3gs. So they switch the 8gb 3gs to an 8gb iphone 4. or even just go ahead and do an iphone 5 but 8gb or even drop to 4gb. Component prices are low enough that they can drop the price greatly, perhaps even down to more like $200-300 full price. Meaning ATT or Verizon (if they make the smaller one also in CDMA) could offer it free with contract. Not everyone is looking to hold tons of stuff so such a model would work for them. Especially if Apple really is about to lala.com itunes and allow streaming of itunes purchased music. That's a common item folks sync and they wouldn't necessarily have to.

Plus if the 'baby' does go iphone 5 there are rumors that it would use a dual antenna set just as supposedly the verizon iphone 4 already has. So you can buy one phone and use it for either network. That could encourage lower prices, a pay as you go option, or at least pay as you go voice with a more cost effective data plan.

Hi TUAW readers

thank you for mentioning my blog. I do mention some current Apple market dynamics in that blog currently on my blog (link in the above) but I have actually explained the economics and profit etc issues about iPhone Nano concept last August, when I started to beg Apple to make that model. The story is probably more of interest to you here, as it talks of global market share impacts etc. Note the article is long, about Apple smartphone strategy in general - so if you want iPhone Nano, please use the subheaders and go far into the story, the Nano strategy is about 2/3 down into the long blog story. It is here:

http://communities-dominate.blogs.com/brands/2010/08/why-iphone-strategy-is-wrong-and-has-to-change-soon.html

I welcome any comments. I think the Nano is inevitable and this would be perfect year to do it, due to the windfall gains of the bizarre Nokia decision haha

Tomi T Ahonen :-)
Communities Dominate blog

Thank you TUAW for fueling this rumor. It amazes me on what you will report on.

Seriously, if AT&T can sell the 3GS for only $49, there has to be a way to sell the iPhone 4 or something close to equivalent for $49 at the next product cycle mark. I can't imagine Steve (or Cook or Schiller) trying to pitch something less than a true iPhone as a serious product. I think this whole rumor has been perpetuated because there has been an iPod nano to complement the iPod for the last five years. I think it's silly reasoning. You might as well start rumors about an "iPhone Pro".

Rember the bezel-less iphone we have been hearing about? imagine a screen the same size as current iphone, (think novetel 3G mifi sized) and no/minimal bezel for speaker grill and FF camera. on the bottom woud be very little bezel, maybe a capacative home botton "area". this would make all these rumors true, and be feasible, right? it would give the impression of smaller, but would keep the same resolution as current iphone, so no app fragmentation.

drop the retina display, drop the IPS display, drop the glass on the display, go back to mostly plastic casing of the iphone 3g and plastic screen material, drop the camera quality, drop the internal storage to bare bones and you have a 3.5" iphone that is cheap. The display, flash storage, camera modules, glass photo flash etc are all costly items, and their markup could easily be cut a little also. One thing Apple wont touch is the app experiance! They may cheap out on the hardware but they won't make it so you can't pay them for apps

I'm wondering if Apple will try to get into the pre-paid MVNO business with an iPhone nano. If they were to sell service plans similar to what Virgin Mobile is selling ($25/40/60 for unlimited data/text and 250/1200/unlimited minutes) right through iTunes and/or the device and add a $249/$299 phone that is somewhere between the iPhone 4 and iPod touch in thickness and a trimmed down bezel - even eliminating the home button in favor of a gesture based system - it could do very well with a younger market who are all buying iPod touches but aren't able/willing to pay for the more expensive phone contracts.

I'm thinking this years iPod touch screen (or even step back to a non-retina display unit), CPU, and RAM specs, maybe an 8 and 16gb model at the $249 and $299 price points. It would be nice to see the 3GS camera replace the rear facing touch camera, but I could also see Apple keeping the fixed focus, low res cam as a product differentiation between the iPhone and the nano.

This would fit with Apple's desire to control the entire user experience, and also be able to sell new phones to customers on a yearly rather than every other year basis.

If there is a 'nano' version of the iPhone the screen size will be very close to 3.5" diagonal; the same size as the current iPhone. The image you've used to illustrate this post is misleading and downright silly.

I've worked in the field of touch-screen usability for the past 11 years developing home automation systems, retail point-of-sale systems and most recently app UIs for the iPad and iPhone. In my years working in this field there is one key lesson that stands true on every touch-based UI I've worked on; they don't scale. An interface designed to work on a 10" diagonal touch screen won't be as easy to use on a 7" screen, or a 15" screen for that matter because the human body doesn't scale. A UI that works on an iPhone works because it has been designed for that size; if you made it smaller it would require more precise interactions making it more difficult to use, not easier.

I often relate this fact to my clients by telling them to imagine thier car 1/3 smaller in every way. Would the seats be as comfortable or the steering wheel the right size for driving? Would the radio buttons and nobs be as easy to push and turn if they were 1/3 smaller too? Of course not, because just as a car has to be designed for a human sized body, iOS apps also have to be designed for a human sized body. Were an iPhone to come out with a screen size more than 5% different than today's iPhone many users would find the new size frustrating to interact with. The bigger the change in size the more frustration the user would experience.

There are a number of ways Apple could reduce the cost of an iPhone to hit a new market but reducing the size would only serve to hurt the iPhone experience. The likelihood of Apple letting that happen are nil.

Doubt it. Apple's plan is already very successful - Sell the previous year's device at a price point less than the base price for the current one. They've done it for the past few years. I think we're much likelier to see carriers offer bite-sized data plans before we see Apple offer a smaller device when frankly, they don't need to.

I've had a 2.7" device that had a VGA screen in 2009 (290+ PPI, good times). That phone was a NIGHTMARE to text on. Keep that in mind as well.

"The handset would be less data-intensive and would debut with a low-cost data plan that costs $15 or less per month."

Erm, $15 is not a low-cost data plan, it already exists and is pretty much standard.