It makes sense that they'd consider a version of the Galaxy Note with lower specs. They could put in a cheaper processor to save some money, for example, and word is that the Super AMOLED display would be swapped out for something cheaper too. The odd thing thing is we're hearing the S Pen stylus could be removed from the mid-range Galaxy Note phablet too. Not everyone uses the S Pen, to be sure, but it is a feature that separates the Note from the rest of the Galaxy family.
We've already seen how Samsung can adapt its higher end devices into more mid-range friendly smartphones--like the Galaxy S III Mini--so it shouldn't be all that surprising that they'd do the same with the Note family. I guess it's one way to get the bigger screen into more hands.
Via Sam Mobile