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Cheaper iCloud-Based iPhone?

The Apple rumor spread on Thursday is that the corporation will outline a low-cost iPhone 4 together with the iPhone 5. The new device will have significantly reduced flash storage, and may be so cheap to make that transporters offer it for free. The name will be not very creative: the iCloud iPhone.

The story seems to be well-sourced — writer, Sheridan, claims to have verbal communication to three independent sources “who are all connected to Apple in different capacities,” and one of them seems to have given him the scoop on launch date ahead of time. 

Sheridan’s sources say the iCloud iPhone will “look like a small iPad,” and that it will retail for $400 — or no cash at all once you factor in the 2-year contract signup discount. The sources are a little short on particulars of exactly how this will rely on iCloud more than any other iPhone. In iOS5, iCloud will back up your entire phone, counting apps. But is Apple ready for a device that runs completely from the cloud, straight after the launch of the app?

With Android phones now beating iPhones, it wouldn’t be astonishing if Apple required boosting its market share on the low end — and having an iPhone that is free (with contract) would go a long way in the direction of that goal. We’re sure that the advertising genii at 1 Infinite Loop would want to include a catchword like iCloud in the phone’s title, as well as pushing the fact that you have access to your music and photos without actually having to upload them... But a memory-free iPhone seems exceedingly unlikely.