Tiny iPhones! That's the biggest rumor about the next generation of iPhone. The Wall Street Journal's source even saw a prototype that's "about half the size of the iPhone 4" and "intended for sale alongside Apple's existing line." Cue the New York Times:
Apple's engineers are currently focused on finishing the next version of the iPhone, which is likely to be similar in size to the current iPhone 4, said one of the people. The person said Apple was not planning to introduce a smaller iPhone any time soon.
But why not? The NYT corroborates multiple reports that Apple's looking to make a cheaper iPhone, but says they'd do it by using cheaper guts, since a smaller phone wouldn't be much less expensive to make and it'd be harder to use. Says the main NYT source, who's "worked on multiple versions" of the iPhone, "Although the innards of the phone, including memory size or camera quality, could change to offer a less expensive model, the size of the device would not vary."
Will be there a second iPhone at all though? A senior Apple exec apparently said in a recent "private meeting" that it wouldn't make sense to have multiple iPhone models—just the current the model and last year's, sold for cheaper.
On the plus side, that free MobileMe revamp as a digital locker for all your stuff might finally be happening. [NYT]