Rumours of a cheaper and smaller iPhone have been around for some time. They have now resurfaced courtesy of a China Times report. The claim (as usual) is that the new model would allow Apple to better compete against cheaper devices, especially lower-end Android ones.
Such rumours have surfaced a number of times but never materialized. Each time, Apple has chosen to simply continue offering an older model at a reduced price along with the new model. With rumours that the next iPhone will sport a larger display, the current iPhone 4S could by default become the smaller model. Does Apple really need another smaller model?
The report adds that the iPhone nano could be introduced at the same time as the next generation iPhone.