iPhone watch: 3G iPhone $199 on AT&T? Two new iPhones coming?

Noah Kravitz
 from  Oakland, CA
| May 1, 2008

Two quick but juicy new bits of rumor dust kicking around the mill this week:

First, Fortune is reporting that AT&T is going to subsidize the cost of the new 3G iPhone for subscribers when it launches this Summer.  According to Scott Moritz, the US carrier will knock $200 off the cost of the forthcoming handset for customers willing to sign a two-year service agreement.  Mortiz goes on to say that "Apple is expected to have two versions of the new iPhone, an 8-gigabyte-memory and a 16-gigabyte-memory model with price tags widely expected to be $399 and $499." 

So that's $199 and $299 after contract, which brings iPhone right back down to Earth to compete price-wise with the Summer's other hot new releases, including Sprint's Samsung Instinct, Verizon's Samsung Glyde, and AT&T's own LG Vu.  You know, if it's true.

Mortiz also writes that "The new iPhone is expected to be released on the one-year anniversary of the original iPhone debut June 27 or thereabouts," and it will sport an amazingly thin 9.7mm profile.  I've recently been using a 9.9mm thick Sony Ericsson W890i and am amazed at how tiny it feels.  An even thinner iPhone?  Sounds too good be true, but I wouldn't put it past Apple.

Second, Taiwan Economic News ran a story the other day citing "foreign institutional investors" as sources pointing to a smaller, lighter new iPhone in the pipeline.  Reportedly this new handset would shrink the device's display from 3.5" to 2.8" and also lighten its weight from 158g to 110g or so.  The weight increase would in part be due to a move from metal parts to an all-plastic housing.

Either this is complete rubbish or Apple is working on a second device - "iPhone nano" of course comes to mind as a name - to be released in addition to a full-sized 3G iPhone.  Between the recent launch of the iPhone SDK, the emphasis on Enterprise integration, and the millions of dollars riding on the iTunes video rental ecosystem, there's no way Apple's going to shrink iPhone's display.  The 3.5" mutltitouch screen on the current model is without question one of its strongest selling points, and a smaller model would pose too many usability risks in addition to disrupting developers' work on iPhone/iPod Touch apps.  For starters, applications would have to scale to fit the current gen of 3.5" screens as well as a new 2.8" model.

So take this one with a big grain of salt, but there is a chance we'll see an upgraded iPhone this Summer along with an entirely new model.  A smaller, less expensive, less featured nano?  A dual-input model with a 2.8" display and physical QWERTY board?  Only time will tell...

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