The Wall Street Journal has officially backed up the "iPhone nano" rumor that was resurrected by Bloomberg last week, with new sources adding more details about the alleged device. In a report published Sunday, the Journal said that its own "people familiar with the matter" discussed the miniature iPhone, which apparently goes by a code name of "N97." The sources also said that Apple is working on a revamp of MobileMe to make it more of an online digital locker, one that will work with Apple's long-rumored music streaming service.
When Bloomberg discussed the smaller iPhone on Thursday of last week, it said the device was about one-third smaller than the current iPhone and that it would be priced around $200 before carrier subsidies. The WSJ's sources pin the size at about half that of the current iPhone and said it would cost carriers half as much (the average selling price to carriers is currently $625). The source—who saw the prototype personally—also said that it had an "edge-to-edge" touchscreen, voice navigation, and an on-screen keyboard.
If the Journal's sources are correct, then it would be slightly larger and slightly more expensive than Bloomberg's moles suggested, but the general premise is the same. The device is smaller and would be significantly cheaper to customers.
In addition to the smaller phones, the WSJ's sources claim that Apple is working on an overhaul of its $99 MobileMe service. "Apple is considering making MobileMe a free service that would serve as a 'locker' for personal memorabilia such as photos, music and videos, eliminating the need for devices to carry a lot of memory," wrote the publication, noting that it may also become a "focal point" of Apple's "new online music service."
That new service could be the rumored streaming music offering that Apple has allegedly been working on ever since it bought Lala. While some believe that Apple wants to focus on video more than music (the company now offers video streams from iTunes to the latest-generation Apple TV), it's still likely that Apple would dabble in music—especially if the company is thinking about reducing the amount of built-in storage in its devices, like the Journal implies. The newspaper's sources say that Apple wanted to launch the service a year ago, but implied that licensing talks have been holding it up.
Like Bloomberg, the Journal says that the smaller iPhone and the new MobileMe will launch this summer, but it also agrees that Apple's plans might change. Both projects are allegedly top priorities of CEO Steve Jobs, who declined to comment on the rumors. (It's worth noting, by the way, that the WSJ says he declined instead of not responding to requests for comment.)
As we noted on Thursday, the rumors about a miniature iPhone have been making the rounds since before the original iPhone even made its debut, and have been reapperaing since then as well. If it's true this time around, then we would hardly be surprised to see Apple introduce it alongside the expected iPhone 5 later this year.
