iPhone Nano 'due out this summer'

 

Apple is rumoured to be planning a budget version of its best-selling iPhone which will sell for less than a third of the current model's price.

Steve Jobs introduces the new iPhone 4

Apple: Steve Jobs launching the iPhone 4 last year

The smaller iPhone Nano could hit the shops as early as this summer with a price tag of less than £150, or like other iPhones, free of charge if bought as part of a two-year contract, according to U.S. reports.

The new version would be around twothirds the size of the current iPhone 4, which is 4.5in long, 2.31in wide, and just 0.37in thick.

It would be designed to challenge the mass market products made by the likes of Nokia, Samsung and Motorola.

The move would also put Apple head to head with Google, which has lent its name and Android operating system to a large number of mobile phones on the market.

Analysts say the introduction of a cheap Nano handset would be an aggressive move for Apple, which has previously traded on its reputation for building upmarket and expensive technology.

The latest iPhone 4 has a starting price of £510 in this country but can cost £612, according to Apple's UK online store. The company has previously had enormous success developing ever-smaller versions of its iPod.

The 'nano' version of the music player is particularly popular with joggers.

Charlie Wolf, an analyst at Needham & Co. in New York, said: 'Instead of targeting 25 per cent of the global mobile phone market, Apple would be going after 100 per cent.' He said a cheaper iPhone would help Apple make deeper inroads in markets such as China and India, where many shoppers opt for lower-priced handsets that don't carry longterm contracts.

The rumours about the iPhone Nano, which were triggered after a prototype was circulated to some industry insiders, have dominated the World Mobile Congress in Barcelona, where Apple's rivals are currently showcasing their latest handsets and tablets.

One reason for the success of the iPhone is the thousands of applications, or Apps, such as maps and games, available for it. Sceptics will question whether these Apps will be useful and easy to navigate on a smaller screen.