Smaller, cheaper iPhone, free MobileMe in the works: WSJ

Screenshot from Vaja about iPhone nano, from Dec. 2008

A few days ago, Bloomberg reported that Apple is working on a smaller, cheaper iPhone. These rumors of an iPhone "nano" have surfaced before, but never produced a product; however, on Sunday, the Wall Street Journal also reported the same thing, lending more credence to the report.

The earlier Bloomberg report said the smaller iPhone would be $200 without a contract, which could mean a device cheap enough to be free on-contract. The WSJ report did not indicate exact pricing, but said that the nano-type phone (codenamed N97, probably to Nokia's chagrin if they read this) would be available to carriers at about half the price of Apple's main line of iPhones. The smaller iPhone, if it is produced, would surface in the summer of 2011.

Rumors of an iPhone nano, including screenshots from well-known case makers such as Vaja have been around for years. Nothing has come of the rumors, so far, and it is hard to imagine the usability of a device with a smaller screen and thus a smaller on-screen keyboard.

Additionally, the WSJ report added that changes to Apple's cloud-based MobileMe service were coming. Apple is considering making MobileMe a free service, something that has been suggested by analysts and users for some time. MobileMe currently requires an annual subscription of between $99 to $149.

The free access to most Google cloud services is something Android users consider a major advantage, and many iPhone users link to Google cloud services for the same reason. The changes to MobileMe, the report said, would turn the service into a "digital locker" for photos and videos, eliminating the need for significant storage on devices, according to the WSJ's source.