I have been following the iWatch rumors with intense interest and it occurred to me that the iWatch could actually be the iPhone Mini. While I am sure Apple has explored designs for cheaper, plastic iPhones and iPhones with a smaller screen, I believe Apple will release the iWatch as their cheaper iPhone. Apple needs to release a cheaper iPhone if it wants to be able to compete in the third world, however, I don't think that Apple would ever compromise the quality of their devices just to make a cheaper one. Thus, I am not very inclined to believe that Apple would release a $200 iPhone. It couldn't have very high profit margins and for Apple to release a device that affordable, they would have to make some very large sacrifices. A $200 iPhone would be a full $100 cheaper than an iPod touch and would need much more technology. I also don't see them fragmenting the iPhone interface by releasing a phone with a smaller screen. So how could they make a cheaper iPhone? Looking back, when people demanded a $500 laptop, Apple didn't make a crap laptop, instead, they created a new device, the iPad, optimized for a smaller screen and it offered a better experience for many low-power needs. Now they are in a similar situation with the iPhone. People are demanding a cheaper phone, and Apple must release a cheaper device to compete in other markets, so rather than make a cheap inferior phone, I think they are going to create a new device all-together. An iWatch. I see a number of signs pointing towards the iWatch being the iPhone Mini. Rumors have been suggesting they are releasing an iWatch for a long time. They have a team of 100 working on it in secret. (remind you of the iPhone and iPad) They clearly have had a lasting interest in watches going back to Johnny Ive getting boxes of watches from Nike. They have released patents for iWatch designs. And importantly, the iWatch market is ripe. People have been warmed up to the idea of an iWatch due to devices like the Up, the Pebble and the Fuelband. All of these signs point to Apple making an iWatch, but what really convinced me that this was the iPhone Mini was when rumors popped up that it would support a full version of iOS. Therefor, it would not just be an assistant device paired to your iPhone, but a fully capable device on your wrist, capable of internet connectivity and access to an iWatch app store. The iWatch probably wouldn't be priced anywhere over $299 making it the perfect price-tag for the low-end device market and would offer many advantages over the iPhone. In addition, Apple has been working in the background to produce a smaller and smaller A5 chip for the Apple TV, a device that is plugged in and clearly does not need such a low power chip. They are using it to perfect production of a low-energy chip so that they can implement it in an iWatch which needs less power than an iPhone and can hold a much smaller battery. There seems to be a lot of evidence and motive for the iPhone being the next iWatch, and I haven't even gotten into the endless possible applications and advantages of it, but let me know what you think.