Apple rumors point to cheaper iPhone 4

New Apple rumors say a less expensive, 8GB iPhone 4 could arrive within weeks. Reports suggest that the model will appeal to lower income families and countries. But what's behind these latest Apple rumors?

Wu Kaixiang/FILE
A man tries an iPhone 4 at the 5th Avenue Apple Store in New York. Apple rumors suggest a cheaper iPhone 4 is coming.

The latest Apple rumors suggest that a new, cheaper iPhone 4 is on the way.

While Apple fans await the iPhone 5 (which may launch in early October), Reuters has pulled attention back to the current hardware. Within the next few weeks, Apple will introduce a revised, less expensive version of the iPhone 4, according to the report.

This new model will have 8GB of storage – smaller than the current 16GB and 32GB options – and a reduced price to match. The pared down specs could help Apple target developing countries, where many people aren't ready to spend hundreds on a new phone.

"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 $150-200," Yuanta Securities analyst Bonnie Chang told Reuters. (The rest of the article relied on unnamed sources). "But I think for an 8GB iPhone 4 the price is hard to go below $200, so Apple will still need a completely new phone with low specifications for the emerging markets."

For a couple years now, Apple has redesigned the iPhone, but kept selling an older model as a budget option. Right now, you can order an iPhone 4 (16 GB) for $199 or double the storage space for $299 – both deals include a two year contract. Or, if you don't need more storage, high-resolution "retina" screen, and a front-facing camera, Apple offers an 8GB iPhone 3GS for $49, again with a contract. Buying an iPhone without a two-year commitment starts at $649, a price that more accurately reflects the true cost of the device.

Yes, the manufacturing expects at iSuppli say that an iPhone 4 contains about $187.51 worth of parts. But Apple's premium image and innovative updates come with a hefty price tag. Research, prototyping, ads, Apple stores, and production quickly plump up $187 into a figure that most customers won't swallow, especially in emerging markets.

So what about the iPhone 5? As stated above, the latest Apple rumors point to an October 7 release, with preorders in late September. It may come in a new "tear drop" shape, could include an NFC chip for credit card-like purchases, and probably won't come with a 4G LTE antenna. But Apple rumors are slippery things. The only people who can truly confirm them are Steve Jobs and company.

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[Editor's note: The original version of this story has been changed to clarify that iPhones have flash storage.]

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