Cheapest Apple Ever : The iPhone Nano

Apple Inc. is developing a poor man's iPhone, dubbed the iPhone "Nano" which may be released mid-summer alongside the iPhone 5. The cheaper phone would use iPhone 4 components and is expected to be two-thirds the size of a regular iPhone and the price is expected to be around $200.

 The device is unlocked so we dont have to stick with a fixed carrier. Apple is said to be working on a "universal SIM" system, which would make the phone compatible with a variety of carriers.
Chief Executive Officer Steve Jobs, who remains involved in strategic decisions while on medical leave, would use lower prices to widen the iPhone’s appeal and keep it from losing further ground to Android devices. Less expensive iPhones may also ratchet up pressure on Nokia Oyj, whose handsets are especially popular in Europe and some developing markets.
Apple Inc. is opting for a cheaper phone as they are facing stiff competition from Google’s Android. Apple will face another challenge as Nokia and Microsoft Corp. join forces in smartphone development.

The main highlights of the New iPhone:

1.Small n Cheap:
Apple has considered selling the new iPhone for about $200, without a two-year service contract. The iPhone 4, sold in the U.S. by AT&T and Verizon Wireless, costs $200 to $300 when subsidized by a contract.
The prototype is said to be about one-third smaller than the iPhone 4, and it had no “home” button.
Apple would sell it at a low price mainly because the smartphone will use a processor, display and other components similar to those used in the current model, rather than pricier, more advanced parts that will be in the next iPhone.

2.Dual-Mode Phone to support a variety of carriers:
Apple is also working on a so-called dual-mode phone. This device would be able to work with the world’s two main wireless standards:
1. GSM
2. CDMA
It couldn’t be determined whether Apple intended to include this capability in the cheaper iPhone.
Apple is working on a technology called a universal SIM, which would let iPhone users pick from a variety of GSM networks without having to switch the so-called SIM cards that associate a phone with a network, according to one person. Having universal SIM capability built-in would help cut the cost of distributing and managing millions of SIM cards.
The new features could also give Apple an advantage over mobile carriers in influencing customers. The device would be affordable without a carrier subsidy, so buyers wouldn’t need to agree to terms, such as termination fees, that carriers demand in exchange for lowering the cost of the phone.

3.Global Mass Appeal:
A cheaper iPhone would help Apple make deeper inroads in markets such as China and India, where many shoppers opt for lower-priced devices that don’t carry long-term contracts offered by carriers.
Apple has also worked on redesigned iPhone software that would let customers choose a network and configure their device on their own.
Apple has gone down-market before. In 2004, when sales of the original $299-plus iPod were still rising, the company introduced the $249 iPod Mini. In 2005, when the iPod Mini was still a bestseller, Apple released the cheaper iPod Nano. Apple began selling the last version of the iPhone, the 3GS, for just $49 in January, though it required a two- year contract.
Google’s Android operating system may suffer if Apple makes the iPhone more versatile and affordable. So it might indeed be a Android killer.