Apple reportedly is planning to launch a lower-cost iPhone informally referred to as the " iCloud iPhone" that will cost less because it contains less on-board hardware and will rely on the Internet and Apple's "iCloud" for more of its functionality. Apple is aiming for a $400 final price for the iCloud iPhone as compared to the typical $600 iPhone price, which the iPhone 5 will cost. The carrier subsidization will bring the cost to consumers down to free with a two-year contract for the iCloud iPhone with the same $199 iPhone cost for the iPhone 5.
To achieve the lower cost for the iCloud iPhone, Apple will use many of the same internal parts from the iPhone 4 since they’re readily available in their supply chain already, and have gone down a bit in cost. Read more here and here.
The iCloud model will be for users who will want to use the iCloud heavily for storage, and keep a lot less on the iPhone itself. The notion of relying more on the network to produce a less-expensive device
That's the sort of development that might have others wondering whether anybody could come up with a cloud-based smart phone that really attempts to function in the same mannter as Google's Chrombooks do for "PC" style devices, namely combine a relatively dumb bit of hardware with functionality derived from the cloud. Read this..
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