You'd think if Apple wanted to make a low-cost iPhone, it would be small. An "iPhone nano," if you will. But a new report from DigiTimes says Apple may release a low-cost iPhone later this year, and actually make the display larger, not smaller.

"Apple will roll out a low-cost version of the iPhone for China and other emerging markets in the second half of 2013, according to supply-chain sources," DigiTimes said. "Some sources claimed that they have seen the sample of the low-cost iPhone, which will come with a larger display, meeting the prevailing trend for the adoption of 5-inch displays for high-end models. They added that the low-priced iPhone will also have a brand-new exterior design."

If DigiTimes' sources are correct, Apple's "low-cost iPhone" could easily look like a Galaxy S3 smartphone, and given its "low cost," it might even compete with Samsung's prices, too.

Digitimes' supply chain sources added that "growing sales of the iPad Mini, particularly in China and other emerging markets, may have served as an impetus for Apple to roll out a low-cost iPhone to repeat its success gained on the sale of the iPad Mini."

Furthermore, with the advent of newer, smaller, cheaper, and more power-efficient chipsets, from CPUs to GPUs to now even LTE chips, "the entry-level to mid-range smartphones may pave the way for Apple bringing out the low-cost iPhone." The sources particularly mentioned Qualcomm's "latest family of Snapdragon chipsets, including the dual-core MSM8960 and the quad-core APQ8064" as a major reason Apple may have chosen to build a low-cost, mid-range smartphone.

Digitimes also said Apple plans to work with China Mobile, one of the largest telecommunications providers in China that has yet to support the iPhone, to build a TD-LTE version of the iPhone. CEO Tim Cook is currently visiting China after having doubled Apple's retail presence in the country in just 10 months, and several other sources, including MacRumors and M.I.C Gadget, have reported on Apple's intentions to finalize an iPhone deal with China Mobile. Cook had even been spotted and photographed at China Mobile's headquarters in June 2011.

A Low-Cost iPhone: Big, Or Small?

On Jan. 2, Topeka Markets analyst Brian White said Apple is likely to release its next iPhone in more colors and screen sizes, implying Apple might sell an iPhone smaller or larger than the current iPhone 5, or even previous-gen iPhone 4S or 4 units.

"Although Apple offers a 4-inch screen on the iPhone 5 and a 3.5-inch screen on the iPhone 4S and iPhone 4, the company has never offered multiple screen sizes for a single model," White said. "We believe this is about to change with the next iPhone offering different screen dies that we believe will allow Apple to better bifurcate the market and expand its reach."

Digitimes' sources and White are both saying the same thing: Apple wants to sell a lower-priced iPhone. Whether the "iPhone 6" will be bigger or smaller has yet to be determined; Apple simply wants it to be cheaper. The obvious explanation: A cheaper iPhone -- easily the company's most popular product -- would help Apple penetrate some key markets, particularly those Eastern, lower-income areas like China and India.

"Several iPhone 6 prototypes appear to be floating around," wrote Jeffries analyst Peter Misek, in a research report back in December. "The model with a 4.8" screen is the most interesting. It has a Retina+ IGZO screen, a new A7 quad-core processor variant, and a new form factor with no home button. Full gesture control is also possibly included."

Misek also believed likely updates to the iPhone 6 would also include "a new super HD camera/screen, a better battery, and NFC," including possibly "an IGZO screen for Retina+, 128GB storage, and coming in 6 to 8 colors."

While Misek's research note sounds like an iPhone fan's wet dream, that's all it likely is -- a dream. The one feature to take away from Misek's ramblings, however, is the 4.8-inch screen, which would correlate with the DigiTimes report indicating Apple's choice to build a large-screen, low-cost iPhone 6.

However, it's important to know that Digitimes also has a mixed track record with accurate reporting. On the one hand, the company correctly predicted last December that Apple would launch two new iPads this year, including an iPad with a 7.85-inch display called "iPad Mini" in Q4 2012, and that's exactly what Apple did. On the other hand, DigiTimes incorrectly reported that Apple chose Samsung's quad-core Exynos processor to power its iPhone 5, when in fact Apple went with its own custom-built A6 chip.

While this "low-cost, large screen iPhone 6" rumor should certainly be considered, it's important to take information from DigiTimes with a grain of salt. Even paired with information from analysts like Peter Misek or Brian White, this information has yet to attain any true validity from a real source. For now, it's just a rumor.

The iPhone 6: What We've Heard So Far

Besides different screen sizes and colors, we've heard that a major focus in the iPhone 6 will be the display. Apple might be going back to the drawing board, as the company is reportedly dissatisfied with the in-cell technologies used to make the iPhone 5's display, and is considering other options.

A Jan. 3 report released by The China Times said Apple might switch to a "Touch On Display" panel currently in development at Taiwan-based Innolux Corp., which has reportedly been licensed to use Sharp's proprietary IGZO display technology.

However, whether or not Apple chooses Innolux to make the next iPhone's screens, Apple is likely going to use Sharp's ultra-thin IGZO display technology for the next iPhone.

In late December, DigiTimes and Apple analyst Horace Dediu both mentioned Apple’s alleged investment in the ultra-thin IGZO displays produced by Sharp, predicting inclusion of the technology in Apple’s next batch of iOS devices, including iPhones and iPads. Dediu also pointed to Apple’s recent $2.3 billion investment in “product tooling, manufacturing process equipment and infrastructure,” believing the cash was used to help bail out Sharp, which had been in financial straits in 2012. Sharp is reportedly going “all in” on IGZO technology, so it’s possible Apple saved Sharp to leverage its investment in the next generation of displays.

IGZO display technology is not only thin and tough, but it can even handle higher screen densities than Apple’s Retina Display, which is visually stunning on its own. IGZO displays can reportedly handle display densities north of 330 ppi; for a quick comparison, the new iPad 4 can only achieve 264 ppi.

One of the better advantages of IGZO display technology is its lower power consumption. Most Apple products, from the iPhone 5 to the iPad 4, require cartoonishly-big batteries to achieve just 8 hours of power -- this is because current-gen Retina Displays are extremely power hungry. If Apple wanted its iPhone 6 to not only last longer during the day but also charge faster when plugged in, IGZO seems to be the way to go for the next generation of iOS devices.

Giving credence to these rumors, Taiwan-based AU Optronics (AUO) reportedly plans to develop a Retina Display for the next-generation iPad Mini, which may require IGZO technology to pull off a feasible Retina Display.

Besides these display rumors, we haven't heard too much about the iPhone 6. However, we have seen a few interesting patents: A patent filed in March but published in September described tactile keyboards, flexible displays and laser microphones and speakers built into an iPhone, designed to conform to the user's needs. Flexible displays would allow for easier holding and typing, while the highly advanced tactile screens would create buttons when needed so the user can feel "keyboard" letters as they type, or touch the topography on Apple's Maps.

It's wishful thinking that Apple would include all these technologies in the iPhone 6 rather implement them over time, but it's certainly fun to think about.

Apple sold 26.9 million iPhone units and 14 million iPad units in Q4 2012.

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