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The iPhone may be the most recognizable smart phone on the market today, but it's not for everyone. A big reason for that is its price, which puts the iPhone out of the reach of many consumers.

That's certainly not a big deal for Apple. The company has never aimed to offer its products at bargain-basement prices, even when the market has provided plenty of motivation to do so.

This said, Apple has managed to very successfully straddle the line between the high-end and mainstream portions of the markets it targets. Take, for instance, the iPod. An iPod Classic will set you back $249, but there is a $49 iPod Shuffle for consumers whose pockets aren't as deep.

In this respect, Apple is sort of like the BMW of the consumer electronics world: the brand is generally synonymous with 'luxury', but there's a seat for more aspirational consumers too.

When it comes to the iPhone, reports have surfaced indicating that Apple will soon take the same approach by launching a cheaper version of the iPhone which the press has dubbed the iPhone Nano

According to the Wall Street Journal, "The new phone—one of its code names is N97—would be available to carriers at about half the price of the main iPhones. That would allow carriers to subsidize most or all of the retail price, putting the iPhone in the same mass-market price range as rival smartphones..."

While there are a lot of rumors swirling about the iPhone Nano and what it will look like, most indicate that the new phone will be smaller, perhaps half the size of the current iPhone, and less feature-laden.

One report even suggests that the Nano will have little storage and that most of the data the phone needs to access will be served up from the cloud via a revamped MobileMe service.

Whatever form the Nano takes, one can be sure that it will have a huge impact in the mobile space. For consumers, a cheaper (or even free) iPhone will be difficult to pass up, and the iPhone Nano could swell the ranks of those who count themselves as iPhone owners.

For carriers, the iPhone Nano could completely upend the lower end of the market, although the thought that storage will be cloud-based must send chills down the spine of carrier executives. And for iPhone developers, more iPhone owners means an even greater opportunity to sell apps (or in-app advertising).

Put simply, the iPhone Nano looks like a win-win-win for consumers, carriers and developers. But it could be a big pain for one company in particular: Google. Although Google has made impressive gains with its Android operating system, Apple is slowly increasing the pressure.

By bringing the iPhone to Verizon in the U.S., for instance, Apple has almost certainly lured many Verizon customers away from Android. An iPhone Nano could do even more to challenge Google, as Android is particularly strong in the lower end of the market where Apple currently has no presence.

If Apple does indeed introduce a new mass-market iPhone, it's not hard to imagine a day when the iPhone is as ubiquitous on street corners and in cafes as the Blackberry once seemed to be in offices and board rooms. The only difference: it seems likely Apple will be able to maintain that ubiquity.

Photo credit: bfishadow via Flickr.

Patricio Robles

Published 15 February, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2392 more posts from this author

Comments (7)

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Charles

Seeing as there's so much buzz around the idea of a 'Diet iPhone' it's probably going to happen. What I think will be more interesting is what percentage of people go for it compared to the 'Full fat' version and how publishers / web designers will adapt to yet another screen size.

over 5 years ago

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Kassie Keeter

Is Apple trying to reach out to a new market? Apple is the BMW of phones and music players, and now they are downgrading to more affordable products for everyone. This is a very interesting marketing strategy. This new nano that is cheaper could take away from the "BMW" appeal to customers.

over 5 years ago

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Rufus Bazley

I think your missing out a key point and that is that not everyone wants an iPhone fpr the simple reason of size, it was the same with ipod's too, they're big and heavy so bringing out a "nano" isn't just about make a cheap version its more about catering for that market.

over 5 years ago

Robin Buxton

Robin Buxton, Online Program Manager at Esendex

I agree with Rufus. One of the main reasons I don't own an iPhone is that it won't fit in my pocket!

over 5 years ago

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popspace

very nice I like it thank you for your sharing

over 5 years ago

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aace

will the iPhone nano still be able to support the apps in the normal iPhone?

over 5 years ago

Carlton Jefferis

Carlton Jefferis, CEO & Founder at Gettus!

Could an iPhone Nano be the next major iPhone release (i.e. June) rather than an iPhone 5? Would take everyone by surprise and might move the iPhone 5 release until later in the year.

over 5 years ago

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