Perfectly-Timed Apple Rumor Hints at Tiny iPhones, MobileMe Overhaul

Wouldn't you know it, but just as Samsung was rebooting its well-received (but sales, meh?) Galaxy S line of tablets and smartphones at MWC, an Apple iPhone rumor arrives courtesy the Wall Street Journal. Updated.

The WSJ all but confirms rumors we heard inklings of earlier this month, in which Apple was said to be developing a small, less expensive iPhone that would be tinier than the already diminutive iPhone 4.

Codenamed the N97, this smaller line of iPhones would be sold alongside normal-sized iPhones (presumably the redesigned one arriving this July), and would sell for roughly half the price.

Also making the list of rumors over at the WSJ is word that Apple's MobileMe online storage service could receive an overhaul. Should the rumor pan out users could expect the $99 to $149 service to become a free one that would allow for the creation of a "locker," says the WSJ. This locker would store personal photos, video and other personal digital effects and could potentially serve as part of a cloud-based music service.

Rounding everything out is a mention of Apple CEO Steve Jobs, who the WSJ reports has made the smaller iPhones and Mobile Me redo a "top priority" even as he recuperates from an undisclosed health ailment.

Update: The WSJ has an interesting update to their story regarding the mini iPhone' screen.

The person who saw the prototype of the new iPhone said the device was significantly lighter than the iPhone 4 and had an edge-to-edge screen that could be manipulated by touch, as well as a virtual keyboard and voice-based navigation. The person said Apple, based in Cupertino, Calif., also plans to upgrade the iPhone 4.

The article goes on to say that "voice-based navigation," perhaps tweaked or updated in some way beyond the iPhone 4's current voice-control feature, will also be included in the smaller phone. [WSJ]