iPhone 5 mockupAnother day, another iPhone rumor.  This one, however, comes from the a highly trusted source of a well-known blog, and not just some analyst trying to fill their quota of predictions before leaving for the weekend.  According to Boy Genius Report, Apple is preparing both a low-cost prepaid handset as well as the next iteration in the family of smartphones.

The first device, the low cost option, would retail for no more than $350 and could even possibly be the iPhone 3GS rebranded as a new option for the budget minded folks who have avoided getting into the iOS world due to price.  We have seen several different versions of the “cheaper” iPhone rumor for a while now, but this version is one that possibly makes the most sense as it would mean next to no extra work for the company to get it out there.    Of course we have also seen stories that it may end up being free on AT&T post iPhone 5 launch, and if the $350 retail price is true, this would fit in nicely with that.

Moving on to the new version of the iPhone, this source is saying that it is not going to be the iPhone 5, but the iPhone 4S instead as some have expected.  The reason for this would be that Apple CEO Steve Jobs may have finally hit on a way to expand the company’s product line without spending a ton on research & development.  Under this supposed new plan, the iPhone 3GS would go prepaid, the iPhone 4S would be come the new top dog, and the iPhone 4 would stay in the mix as a mid-tier phone.

What adds some credibility to this rumor over a lot of the others floating around out there is that it actually makes sense.  Android is taking over the market based on sheer volume of handsets available alone.  By Apple finally offering three phones, as opposed to the current two, and making sure they hit various price points and plan concepts, Apple could take a lot of the wind out of Google’s sails.  Add in the rumors that the iPhone is coming to Sprint and T-Mobile, and a massive plan to win a much larger chunk of the market really starts to take shape.

Of course none of this will be confirmed until Apple takes the wraps off its new phone, which the source says should be some time in August.

What do you think?  Is apple going for a multi-prong attack on the cell phone market?

[via Boy Genius Report]