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Thursday, July 19, 2007, 10:00 am PT (01:00 pm ET)

Sources: Apple set to grow iPhone family pre-holidays

Apple Inc. this fall plans to accelerate its assault on the 1 billion unit worldwide cell phone market with a second incarnation of its iPhone handset that will likely appeal to an even larger audience, AppleInsider has learned.

The move is believed to be part of a broader, all-out blitz on the consumer electronics sector this holiday shopping season, in which a staggering array of gadgets from the Cupertino-based firm is expected to leave would-be rivals confused and unable to react.

Extremely reputable sources have told AppleInsider in recent weeks that the company's iPhone roadmap for the 2007 calendar year includes not one but two distinct models, the second of which is set to turn up just months after the first.

According to one source, development of the second model has followed so closely on the heels of the inaugural iPhone that it was making its final pass through engineering around the same time that today's model hit the manufacturing lines back in May or early June.

Conceived as a scaled back, lower cost alternative to today's iPhone, the second iteration of the handset is presumed to marry iPod functionality with rudimentary cellular capabilities. More resource-heavy Internet browsing and e-mail capabilities are not expected of the device.

In providing the first visual descriptions of the handset, long-standing industry sources — who've continually been in tune with Apple's future music directions — have dubbed the device "an iPhone nano" because they say it best describes the the handset's overall form-factor and aesthetic.

Pricing of the new handset is expected to fall significantly below the $500+ asking cost of today's iPhone models, these sources say, but not so much so as to pinch sales of an upcoming revision to the iPod nano.

Like today's iPhone, the new model is expected to sport a revolutionary user interface, clues of which may have recently been revealed in a trio of patent filings.

The filings published earlier this month detailed telephone and text entry interfaces for a cellular-capable device via a virtual rotary click-wheel. One in particular described segmenting a click-wheel's circular shape into various regions to enable quick phone dialing by sensing which region was touched.

(The near-simultanious appearance of these filings, ensuing scuffle amongst Wall Street analyst over the prospect of an iPhone nano, and the notion that a corresponding device is actually flirting with manufacturing ramp, all appear to be part of an eerie coincidence at this time.)

In a move that would stand in stark contrast to the June 29th iPhone launch, where supplies were exclusive to Apple and AT&T stores, there's also some informed speculation amongst sources that the new model would be immediately available through a larger network of Apple third-party retailers and AT&T partners.

Further details will be published if and when information becomes available.