Apple working on N97, claimed to be 'about half size of iPhone'

APPLE is reported to be working on a new line of iPhones and a considering free access to its online storage service.

APPLE is reported to be working on a new line of iPhones and a software overhaul that would make it easier for customers to access entertainment and personal photos and videos.

The Wall Street Journal reported that one of these people, who saw a prototype of the new iPhone several months ago, said the new device - one of its codenames is "N97" - was intended to be sold alongside the current line of iPhones and would be about half the size of the iPhone 4.

The phone would be available to mobile carriers at about half the price of Apple's main line of iPhones, this person said.

Alongside the development of the new line of iPhones, Apple is also reported to be exploring a major overhaul of its MobileMe online storage service.

The service currently requires an annual subscription payment of $US99 to $US149.

Under plans Apple is considering, MobileMe would become a free service that would serve as a "locker" for personal memorabilia like photos and videos, so there would no longer be a need for a lot of memory on devices themselves.

MobileMe could become a focal point for an online music service that Apple has been developing for more than a year.

The new line of iPhones and the MobileMe service are among Apple chief executive Steve Jobs's top priorities and he has been closely involved in the development despite going on medical leave in January, a person familiar with the matter said.

The person said the new iPhones and the MobileMe service are aimed for release this summer, though those plans could change.