Once again, rumors have broken out that Apple's next addition to the iPhone line will be a 'low cost' device designed to widen the gadget's appeal. AppleInsider reports that Katy Huberty, with Morgan Stanley, has claimed that price is the 'biggest barrier' to iPhone adoption. Thus, in June, Apple will launch an 'economically friendly' iPhone that 'potentially' includes new 'gesture-based' technology.
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I wouldn't put too much stock in this rumor. People have been expecting a cheap 'iPhone nano' type gadget for a while. Once the iPhone 2010 launches, the 3GS will drop down to $99. What more can Apple do to reduce prices? It's not like the iPhone is more expensive than any other high-end smartphone.
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Analysts will be rolling out predictions like this with greater frequency over the next few months. I wouldn't put too much stock in any of them. As a general rule, the devices that Apple actually launches have very little to do with whatever hyped predictions were made for them in the preceding months.