Fore these ideas about a "low cost iPhone" to be true, they need to include a redefinition of what a low cost "smart"-phone is.
It's not a F#%%ing large screen-latest-CPU-new-design-thing. Rather a iPod Nano - stripped iPhone but with some sort of essentials for tying the user to the Apple universe. What can that be?
A iPod using 3G to stream from iTunes-match? And for making calls?
Apps? Hardly the same as for the iPhone.
Webb? Don't think so but maybe. Thus maybe...