Apple 'plans nano form of the iPhone'

Last updated at 12:24 11 July 2007


A cheaper version of the iPhone will be launched by the end of next year, a

market analyst claims.

In a note to clients, J.P. Morgan analyst Kevin Chang said, based on a

patent Apple filed in

November, a new iPhone is

coming that will cost $300

(£150) or less.

It is likely to

be controlled by a scroll

wheel like those on iPods,

and might have “rather

limited functionality”.

He said the patent filing

showed how to dial a phone

number with the scroll

wheel.

The iPhone combines a

mobile phone, media player

and wireless internet device,

and sells for £250 to £300.

Mr Chang said the new

device would replace the

existing iPod Nano because

that was the only way for

Apple to launch a lower-end

phone without making the

iPod obsolete.

Apple is thought to have

sold nearly 700,000 iPhones

in the first weekend they

went on sale. An Apple

spokesman declined to

comment on the speculation.

However shares of Apple Inc. hit a new all-time trading high yesterday after the speculation.

A more sobering report from a different analyst at the same securities firm said he could not confirm his colleague's assumptions, however. He told his clients in a report that a low-end phone from Apple was unlikely in the near term.

Apple spokeswoman Natalie Kerris declined to comment on the dueling Wall Street reports. "We don't comment on rumors or speculation," she said.

Many analysts have predicted Apple would introduce future versions at lower price points, and the patent filing - disclosed by the U.S. Patent and Trademark Office last Thursday - further fueled the rumor mill.

The patent application, filed in November, describes a multifunctional handheld device with a circular touch pad displaying illuminated symbols that could change depending on the mode in use. Drawings in the filing show an iPod-like device with a scroll wheel resembling a rotary phone dial.

Apple enthusiast Web sites quickly offered up their interpretation: an iPhone Nano.

Chang said there's "a decent chance" that Apple would accept operator subsidies for a cheaper iPhone model, which could sell 30 million to 40 million units in fiscal year 2008.

But Chang's colleague, Bill Shope in New York, who has covered Apple for J.P. Morgan since 2003, offered a different view in a note issued Tuesday. Though a lower-priced iPhone is inevitable, a near-term launch of one would be "unusual and highly risky," he wrote.

"Not all consumers want a combined phone and music player, so Apple is likely to keep the iPhone and iPod as distinct business segments for as long as this makes economic sense," he said.

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