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Apple May Reveal Cloudy iPhone September 7

Growing weary of the Apple rumor mill? Don't fret: we're almost done for the year. In this latest installment of the iPhone 5 drama, reports are pointing to a cheaper, cloud-based iPhone that will be revealed next to the iPhone 5 during an Apple press event rumored to take place on September 7 here in the U.S., and September 8 in Japan. This is also the same day the fruity company is expected to reveal its latest iPod Touch with 3G connectivity.

To be honest, there have been so many rumors concerning the September event that its making heads spin The Exorcist-style. But one thing is for certain: all reports indicate that Apple plans to launch a new low to mid-range iPhone next to its flagship iPhone 5 smartphone. The device has seemingly ranged in size since word first surfaced of a dual release, spanning from a mini-iPhone to a upgraded iPhone 4 with a cheaper chassis.

Now there are reports stemming from three separate "insider" sources that claim the cheaper iPhone 5 sidekick will actually be based on iPhone 4 hardware, iOS 5 and Apple's upcoming iCloud. The device will rely heavily on the latter iCloud feature, sporting less internal storage than previous models. Apple reportedly stalled its typical June launch date so that it could release this second, cloud-based smartphone along with the new model before the end of the summer.

As Apple'N'Apps points out, reducing the device's on-board flash memory capacity not only means a reduction in storage, but a reduction in price. If storage accounts for 15-percent of the cost to build the device, relying heavily on the iCloud service should mean a nice reduction in the overall device price for the consumer. Of course, that will depend on how much Apple plans to charge for everyday iCloud use – that's something we'll have to see come September 7.

But this rumored iCloud model, despite is probable low price, obviously won't be for everyone – those who would rather install apps locally and store media on their device will likely stick with the typical 8 GB, 16 GB and greater models. Still, if the rumored $400 base pricetag for the iCloud iPhone is true (perhaps even free after carrier subsidization), then many loyal Apple consumers may find themselves embracing a new frontier after all: apps and multimedia in the cloud. And if Apple succeeds in enabling users the ability to purchase and stream music and video (movies, TV episodes etc stored i the cloud) to the device, then there really seems to be no reason not to switch to a cloud-based smartphone.

According to the three anonymous sources, Apple is shooting to offer a cloud-based iPhone experience that's unique to the market and accessible by many because of its price. In addition to the flash storage reduction, it will also feature a smoother yet cheaper aluminum back and siding which contradicts previous reports that the new-yet-cheaper iPhone will have an all-plastic casing and screen. Still, the difference at first sight between the iPhone 5 and the iCloud iPhone will be that the latter will resemble a small iPad. Could this device be the basis to prior rumors of a small-screen iPad?

Regardless, if the September 7 date is true, then we have less than a month to endure additional rumors until Steve Jobs whips out the real thing in front of a live audience. If Apple does produce a cloud-based iPhone, will it change the face of the mobile industry? Will it be a success? And most importantly, will it finally short-circuit Android's dominance in the mobile sector?