The twists and turns in the cheap iPhone saga are enough to give you whiplash.

Reuters this morning announced that it has withdrawn a story based on Apple marketing head Phil Schiller dismissing the idea of a cheaper iPhone. The news organization cited “substantial changes” to the report the story was based on from the Shanghai Evening News. Reuters won’t be issuing a replacement story, and it’s unclear at this point what the changes to the original store were.

By rescinding the story, “Apple exec dismisses cheaper phone as a market share grab-report,” Reuters continues to fuel the rumors that we’ll see a cheaper iPhone sometime this year.

In our coverage of the Shanghai Evening News story, our own John Koetsier noted that Schiller’s comments weren’t trustworthy. Apple may not want to build a “cheap” and flimsy iPhone, but it would certainly make sense for it to make a less expensive iPhone to increase its penetration in China.

Recent reports from the Wall Street Journal and Taiwanese news site Digitimes sparked this latest wave of cheap iPhone speculation. Apple’s cheapest iPhone at the moment is the iPhone 4, which is free with a two-year contract in the U.S. But it’s still pretty expensive off-contract, costing $450 in the U.S., $490 in China, and $750 in Brazil, according to AppleInsider.

There’s no doubt that Apple will want to drive down the cost of the iPhone for markets like Latin America and China.

Filed under: Mobile, VentureBeat

Categorised as: Chief Digital Officer | Digital Media | Feedster

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