The “Cheaper” 8 GB iPhone 4 Will Be $400 Without Contract

A report today from Taiwan Economic News throws cold water on the idea of a $200 prepaid iPhone flooding third-world markets. The report claims that the upcoming 8 GB iPhone 4 will be priced at around $400 without contract. That pricing is similar to what Apple did to the iPhone 3GS after the launch of the iPhone 4, where Apple released a new 8GB model of the 3GS and made it available for $99 with contract, which roughly translates into a $400 retail cost sans contract.

Noteworthy is that the iCloud is regarded as a budget-priced iPhone, which will be priced at around US$400 per unit, US$200 cheaper than the first-edition iPhone, and will sell for an even lower unit price, or be free of charge, when bundled with telecom service contracts.

The global market survey institute iSuppli explained that the reason why the device is so competitive is application of the cloud computing storage technology, which allows Apple to cut 15% production costs through using less storage components in the product. Hopefully, iCloud will be sought-after in the middle-end segment and help Apple to further boost global market share to keep competitors behind itself.

Early this year, Apple exec Tim Cook fanned the flames of an inexpensive iPhone by telling analysts Apple didn’t want the iPhone to be “just for the rich.” However, just a few weeks ago, Cook seemed to throw caution on expectations by saying Apple wouldn’t release a cheaper iPhone unless it was a “category killer.”

A recent report from Reuters also suggests that rumors of an inexpensive iPhone are just a repeat of Apple’s iPhone 3GS strategy, ie, releasing a version of the iPhone 4 with less memory (8 GB) and lowering the cost to around $400 without contract. However, including new technology such as a dual-mode CDMA/GSM chip would allow the phone to work in new markets such as India where previous iPhones couldn’t.

*Updated article to correct that Apple has never sold the 8GB iPhone 3GS without contract.*