Apple developing smaller, cheaper iPhones

Apple is developing a new lines of smaller and cheaper iPhones and overhauling its software to facilitate users’ access to entertainment, photos and video, The Wall Street Journal reported on Sunday.

The new device – code-named “N97” – will be about half the size of the iPhone4 and cost about half as much as Apple’s main line of iPhones, the Journal said, citing a person who saw a prototype of the new gadget several months ago.

Meanwhile, the computer and electronics giant is also revamping its MobileMe online storage service, which currently requires users to pay between $99 and $149 per year, and possibly making it a free service so users could upload photos and videos there instead of on devices, according to the report.

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