Opinion

Apple moves to secure components, plots baby iPhone?

Following last month's news that Apple was seeing constrained supplies of iPhone components, a high-profile leak to the South Korean media, detailed in the Wall Street Journal, has claimed that Cupertino is in talks with Samsung to secure a $7.8bn contract agreement for supply of, among other things, LCD panels, mobile processors and flash memory.

Apple is also thought to have laid out $3.9bn separately to acquire further stocks of LCD panels from LG, Sharp and Toshiba, suggest analysts.

The move plays nicely into growing levels of chatter in the tech community concerning the existence of a cut-price baby iPhone 'Nano', which a select few industry insiders claim to have seen.

The rumoured device is said to be about two thirds the size of the regular model, includes no 'home' button and could retail for as little as £120 all-in.

Given Apple's habitual veil of secrecy this is about as much as anybody can say with any certainty about little iPhone Junior for now, although naturally the Apple-centric blogosphere has gone bananas at the prospect, trading intimate details of features Apple fans would like to see.

But speculation aside it doesn't take a genius to figure out the pros for Apple, here.

It gives the vendor, renowned for its high-end pricing, an opening into the lower end of the smartphone space, a sector where Google's Android platform has performed well; given Apple's cachet of fashionability we see potential for success here.

It could also bring Apple some valuable leverage in the Far East, where nimble local companies are often able to quickly bring similar product (some might say knocked-off product) to market - a situation bemoaned by Nokia boss Stephen Elop last week.

This was first published in February 2011

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