Free El Cinco arriving September 7?

Okay. Find a salt shaker. Unscrew the cap. Drink all the salt. NOW you can read this item.

CNET is reporting on a brace of new rumors that Apple will roll out a whole bunch of products on September 7th. There will be some new iPods but the big moment would be TWO iPhone 5s. The regular one and a cloud-based stripped down model that would be essentially free with a two-year contract from Verizon or AT&T.

From CNET:

C> iting information from three independent sources "all connected to Apple in different capacities," AppleNApps says the new phone would combine iOS 5 and iCloud to use Apple's new cloud-based service more so than local storage to house data. Cannibalizing parts from the iPhone 4 and using less flash storage, the iCloud iPhone would be cheaper to produce than the full iPhone 5 and ultimately be free to consumers who sign up for the typical two-year contract.

It's been long speculated that there's no practical or financial reason why Apple shouldn't make the iPhone free to consumers with a new contract. Mostly it's come down to branding. Apple wants to have the perception that what it offers always has direct value. And historically, Apple has seemed a lot less worried about big percentages of market share, it would rather have loyal customers paying a premium.
But heck, how many people would jump to the iPhone if they heard it was free (along with a contract that would cost many hundreds of dollars).

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John Moe is the host of Marketplace Tech Report, where he provides an insightful overview of the latest tech news.


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