So there have been a bunch of rumors about a cheaper smaller iPhone being released later this year. So far, to me, they don't make much sence, however the idea of a cheaper iPhone coming out to go up against cheap android phones does make sense. There are two directions I feel make the most sense on how they can accomplish that, theory 1: its a revamped 3GS. Basically they can release the 3GS with a couple of tweaks (a4 chip, front facing camera, and retina screen found on iPod touch, everything else the same except thinner) and have this as the entry level iPhone. They can have this as free with contract or $299 off contract and just completely dominate that market. If they're smart they could also sttrike a deal with the carriers to where no data plan is required. This I feel would be the best strategy, it keeps the line simple and compatible for the AppStore, and gives them a good product at each price point (free - revamped 3GS, $99 - iPhone 4, $199-299 - iPhone 5) Theory 2: new phone that is basically an iPod nano (2009 version) with a phone. It wouldn't have a web browser nor any apps, like the iPod nano. It would just sync up with your iTunes music and allow you to make phone calls. This would of course be sold with out data plan. It would be priced free with contract and $199 without. While this kind of device would probably do well, I think apple wants as many people possible to have access to the app store, plus other services apple is now offering (mobile me, iBooks, FaceTime) and something like this would just bypass all of that. So I put this as less likely than theory 1, but I would put this ahead of some of the other rumors of an iPhone with a smaller screen. So what do you guys think? You have any additional theories of your own? Thanks for reading.