Sources Confirm Apple (NASDAQ:AAPL) Releasing Smaller Smartphone in Summer

It appears ongoing rumors that Apple (NASDAQ:AAPL) will be selling a smaller and less expensive version of its smartphone sometime in the summer of 2011 are true, as a report in the Wall Street Journal, citing people close to the matter, say they will release the smaller phone about the same time they release the iPhone 5.

According to the source, the size of the smaller phone will be about half of the iPhone Apple offers at this time. Prices will be approximately half of the price for the iPhone 4.

The report also said Apple will be changing its MobileMe online storage service. The new idea will be to possibly make MobileMe a free cloud service in order to eliminate the need for large storage capacity.

At this time MobileMe costs $99 a year to use.

Apple was trading at $359.20, up $2.35, or 0.66 percent, as of 12:01 PM EST.