While we all expect new products from Apple to come with various improvements, such as faster processors, more memory storage, etc; a report from Reuters comes to suggest that Apple will release within weeks a low-end version of the present iPhone 4 with less storage capacity, probably to target markets in developing countries.
The new iPhone 4, according to Reuters, will have 8GB, half as much the current version. If we look back though, this isn't actually a surprising move, since Apple did the same thing with the iPhone 3GS when the iPhone 4 was launched. The iPhone 3GS' memory was reduced to 8GB and its price was also lower. It seems that Apple will do the same thing when the iPhone 5 takes over as Apple's premier smartphone. If you ask me, this is a bit of a risky move, as consumers might consider it obsolete.
By releasing a cheaper iPhone 4, with cheaper materials and other possibly other slightly downgraded specs, Apple could compromise it's premium brand image. However, with the arrival of the iCloud you could argue that smartphone memory will become a less important asset.
On the other hand, this move could "educate" Apple's client base that you can wait for one year and get a big discount on the device you want. That is unless you are lured by the charm of the newest unit.