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Cheaper Apple iPhone 4 with less storage rumored to be on the way

August 23, 2011 | 11:51 am

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Apple is working on building a low-cost version of the iPhone 4 that will feature less storage memory, according to a new report from Reuters on Tuesday.

The rumored new iPhone 4 model, which Reuters said will hit retailers late next month at about the same time as the expected iPhone 4 follow-up (which could be called iPhone 5 or iPhone 4S), will feature 8 gigabytes of memory, half of 16 gigabytes offered in the base iPhone 4 model currently.

Is any of this surprising? Not in the least.

Apple already made the same move with its iPhone 3GS when the iPhone 4 first hit stores a little more than a year ago.

The iPhone 3GS was bumped down to 8 gigabytes of memory and currently sells at $49 with a two-year contract from AT&T.

The iPhone 4 which displaced the 3GS as Apple's latest and greatest iPhone, took over the iPhone 3GS' price points and memory options -- 16-gigabyte models for $199 and $299 for a 32-gigabyte handset, each with a two-year data plan.

When the Cupertino, Calif., tech giant introduces a new iPhone, which has been rumored to be in late September or October, it would make a lot of sense that the current iPhone 4 would get a price and memory drop. A move such as this would be merely a repeat in strategy for Apple.

But, if Apple's strategy stays the same, the $49 iPhone 4 with 8 gigabytes of memory would require a 2-year data plan.

What could possibly be new, if Apple actually does this, is creating an even lower-cost version of the iPhone 4 with not only less memory, but also cheaper materials and maybe other downgraded specs.

This move would allow Apple to sell the retooled iPhone 4 for $200 or less without the need for an expensive data plan to go along with it, giving consumers more freedom to find a carrier and service plan they want, Reuters also said in its report.

Why would Apple want to do this? Analysts who spoke to Reuters speculated (as many have done for months) that Apple wants a lower cost iPhone to offer to emerging markets where the current iPhone is unattainable due to its price, which is only as low as it is with a contract due to carrier subsidies.

"Apple may want to push into the emerging market segment where customers want to switch to low- to mid-end smartphones from high-end feature phones, which usually cost $150 to 200," Yuanta Securities analyst Bonnie Chang told Reuters.

So, what will Apple do? More of the same with a cheaper iPhone 4 or a wholly new iPhone 4 for emerging markets? Both? Or maybe something entirely different -- such as a new lower-end iPhone model altogether?

Apple, as usual, doesn't comment on rumors and speculation.

But what do you think would be a good move for the iPhone line? Should Apple keep things as is, or launch a new low-priced "unlocked" iPhone, free of the need for a carrier contract? Let us know where you stand in the comments.

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-- Nathan Olivarez-Giles

twitter.com/nateog

Photo: Apple iPhone 4 units. Credit: Chris Goodney / Bloomberg

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