Apple is looking to slow the advancement of Android phones by creating a smaller and much cheaper version of the popular iPhone. This version of the iPhone would be noticeably smaller than the current version.
An inside person at Apple claims to have seen the prototype version of the iPhone but asks not to be mentioned because the plans have not gone public yet. Also mentioned was the fact that Apple is working to make the iPhone easier to switch between wireless carriers. It will support a dual mode operation that will be able to switch between CDMA and GSM networks worldwide. We can see evidence of this change in the newest Verizon iPhone 4 released to the public. Apple is also researching a sim-less version of this phone as well.
A rumored price mark for the smaller iPhone could range around $200 without a contract. If this is true this phone could appeal more to lower income families and families that want to get their children the iPhone but cannot afford the current one.
The device may be announced in the middle of this year but is possible that it could be scrapped or discontinued by that time. The prototype was said to be around 1/3 smaller than the current version of the iPhone 4. [bloomberg]