Rumor: 'iCloud Phone' is Apple's September 7 song?

By Jonny Evans

I looked away for just a moment and suddenly found that overnight those 'iPhone nano' rumors have broken out, only now it's not an iPhone, but an 'iCloud Phone', and the Apple [AAPL] legend-providers are telling us this device will be the company's big stab at making sure its smartphones aren't just "for the rich".

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[ABOVE: Would an iCloud Phone turn on Apple's Holiday season sales the way the iPod nano has iPod sales?]

iPhone for the people

Now, other than applauding Apple for sensing the change in timbre of the times which demand social conscience and that what's on offer become more ecumenical/accessible, what can you imagine this iCloud Phone will do?

A Quick Reprise: The chatter claims the iCloud Phone will host little in the way of onboard storage, but will link up with your iCloud 'stuff' so you can play your music and other media, and access all the other bits and pieces that make us happy with an iPhone, including your apps, downloaded as and when you need them.

The chatter also reckons the new gadget will cost around $400 (so you should get it free with a two-year contract) and will be basically the same an iPhone 4, except for a different and cheaper back, among other cost-of-materials-reducing changes.

Will it sing?

Music will be key to the success of this device. We will want access to all our music libraries using our phone. However, in order to deliver this, Apple will need to reach licensing deals for each territory it hopes to offer music locker or streaming services in.

At present it is my understanding that Apple only has such deals present in the US. This suggests an initial US launch for the device. This is in common with historical practice, but still leaves the future open for expansion of the low-cost offering into developing economies, once deals are signed. Given these new iCloud features were revealed in June, it is possible negotiations in certain key countries have already begun.

The success of the device will also hinge on bandwidth. The potential of the device is evident -- your data will be safer, for a start. You can also imagine strong sales, particularly in value-conscious markets, as people rush to get an iPhone 4 at a budget price.

The bandwidth barrier

However, while the devices will excel using Wi-Fi, over the mobile airwaves there may be some degree of performance anxiety. The demand for data is causing provision of service problems with some carriers at some -- usually peak traffic -- times.

Responding, carriers worldwide are moving to abandon all-you-can-eat data packages, because they don't feel they are getting the best side of these deals. We are using a whole heap of data, causing carriers to invest in new bandwidth to a point at which they don't feel things are profitable any more.

Unlimited sacrificed

Carriers will like the iCloud phone because they will be able to offer data packages for specific needs, here's four notional examples:

The Music phone: Unlimited access to your iCloud iTunes collection, including streaming. General data usage 2GB/month for $20 per month.

The Communicator: Unlimited voice, messaging, FaceTime and email exchanges; Access to the carrier's own 'About town' and 'Travel Info apps'. General data usage 2GB/month for $28 per month.

The Movie: Unlimited access to your iCloud iTunes and movie collection, including streaming. General data usage 4GB/month for $50/month.

The Gamer: Play all your games online and offline -- including all the new Nintendo iPhone titles - with unlimited GameCenter data sharing and more. General data usage 2GB/month for $20/month.

NB

: I realize these aren't real products and they haven't been fully thought through, but you can rest assured that at some point carriers will begin to segment the market by data usage preferences and begin to charge according to such use. Carrier conversations tend to focus on how to monitor and charge for such usage.

Meanwhile, iPhone 5 rumors continue to flow, with some claims now speculating the device won't show until next year! This would virtually guarantee the market would flock to these new iCloud Phones, leaving Apple free to respond with a powerful and much-upgraded iPhone 5, perhaps equipped with pico projectors, payments support and other enticing consumer attractants. Could this also hint the iPhone 5 may be powered by the A6 processor that TSMC has just put into production?

What do you think? Please tell us what you think in our shiny new comments section below. And please follow me on Twitter so I can let you know when I post new reports here at Computerworld.

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