Apple’s reputation in the tech world is about as esteemed as Ferrari’s is in the automotive industry. When somebody has an iPhone, regardless of what generation it is, you know it’s class. So, if were to hear that Ferrari would be making a vehicle that only cost $30k as opposed to $190k, what would you think about that vehicle? What would you begin to think about the brand? Obviously, the price of a Ferrari will never match the price of a smartphone, but we could say otherwise on their reputations.

The Wall Street Journal reported that Apple is working on “a smaller, more flexible iPhone”. Rumors say that it will feature an ‘edge-to-edge’ touch screen, a virtual keyboard, voice based navigation, and will rely largely on Apple’s revamped ‘MobileMe’. MobileMe is Apple’s Cloud service. It allows users, straight from the cloud, to access pictures, videos, music, and more for $99 a year.

This sounds great, it seems like it would appeal to a larger audience but is this the smart thing to do? Will all apps be compatible with this device? What will this phone do that the regular iPhone 4 or iPhone 5 versions can’t? Will the experience be as pleasant as it is on a ‘regular’ iPhone? We’ve already seen Apple let go of some of their older generation iPhones and iPods with iOS 4.3 and this sounds a lot like the dreaded F-Word. Fragmentation.

On the plus side, this will definitely sell well. Especially if the price is right. Also, Cloud-Computing is the technology tomorrow. This could eliminate the headache also known as iTunes and give us complete control, straight from our mobile devices. One of the best advantages has the be the fact that mobile providers will be forced to upgrade their data speeds, coverage, and reliability. Google and Apple are making a huge push towards cloud-computing and I don’t see this as a bad thing at all. AT&T, Sprint, T-Mobile, and Verizon, among others, are going to have to provide better service if cloud-computing is going to work.

Although all of this is speculation, it’s still good to prepare yourself for the future. What do you see as an advantage or disadvantage to a ‘lower-end iPhone’? Do you think cloud-computing is the way to go?