iCloud iPhone rumor needs a grain of salt that could sink the Titanic

I have often said that the Apple rumor mill is never ending. The second new devices hit the market after months of rumors and speculation, the rumors start up about the next version. Right now, the iPhone 5 is the big rumor in the Apple barrel. There have been rumors in the past that pointed to the cost of the iPhone 5 and that there may be more than one new iPhone coming.

What Neowin is reporting today is a rumor about a rumor, making it doubly suspect. For one we have no idea at this point if there will in fact be two iPhones that launch this year. We keep hearing there will be the iPhone 5 and a cheaper iPhone that launch. The new rumor today claims that the cheaper iPhone will in fact be an iCloud iPhone.

The rumor claims that the cheaper phone will sell for $400 with no contract and will rely on iCloud for most of its storage needs. Using iCloud would presumably make the phone cost less to build. The thought is that the phone may even be able to be offered for free with a new contract. Do you think there is any chance that the cheaper iPhone that launches will have the same hardware as the iPhone 4 now and use iCloud for all its storage needs?

[via Neowin]