Edible Apple

Something’s afoot, folks. Last week Bloomberg reported that Apple was working on an iPhone with a smaller footprint that would be available to customers on the cheap and without a 2-year contract. Admittedly, we sort of scoffed at the report noting that one can currently pick up an iPhone 3GS for a paltry $49, albeit with a costly data plan.

Well, it might be high time for us to eat some crow.

The Wall Street Journal on Sunday corroborated Bloomberg’s report stating that Apple is busy working on a new line of iPhones to more aggressively compete in an increasingly competitive marketplace with an ever growing number of smartphone choices. That being the case, Apple is believed to be working on a new iPhone that measures in at 1/2 the size of the iPhone 4. As such, the cost to carriers would be cheaper and would result in savings passed onto the consumer. In other words, we might not be far off from a day when a user can purchase an iPhone nano on the cheap and without an expensive data plan. This would no doubt bolster the population of iPhone users, thereby making the iOS platform all that more attractive to developers who are now faced with a plethora of software platforms and a finite amount of resources.

One person speaking to the Journal noted that a new line of iPhones remains one of Apple CEO Steve Jobs’ top priorities. In fact, this past week came word that Jobs was still heavily involved with iPhone and iPad development from his home, and that he had even been seen on Apple’s Cupertino campus recently.

The WSJ’s source claimed that he/she had seen a prototype of a smaller and lighter iPhone model, stating that it came with an edge-to-edge screen with multitouch support along with a virtual keyboard and voice-based navigation. So yeah, nothing too revolutionary there. But an iPhone sans a data contract is an interesting proposition for those suffering from iPhone envy, yet simply can’t economically justify paying for a data play they may not have any use for.

Apple though is keen on consistency – hence the resolution on the iPad – so if reports of this somewhat mythical iPhone Nano come to fruition, it’ll be interesting to see if the device will have full access to the iTunes App Store.

Meanwhile, the report also noted that Apple is contemplating a complete overhaul of its MobileMe service. Citing the same source of the smaller iPhone rumor, the Journal writes that Apple is considering making MobileMe a free service that “would serve as a “locker” for personal memorabilia such as photos, music and videos, eliminating the need for devices to carry a lot of memory.”

The new service would give users access to their iTunes libraries from, say an iPhone or iPad, instead of requiring that the devices be synced by cable with a computer and use space to store the actual files, the people said. The new service likely would be compatible with the iPhone 4, one of the people said.

Though Apple is hoping to release revamped MobileMe this Summer alongside a new lineup of refreshed iPhones, Apple would first have to wade through a tangled web of licensing issues pertaining to streaming media. The report notes that talks at this point are still in the preliminary stages.