Bloomberg is reporting that Apple plans to introduce a low-priced iPhone to compete with cheaper Android alternatives. The device would not require a 2-year contract, making it a fitting phone for customers who fear commitment. $200 is dirt cheap for an off-contract device—current iPhone 4s are $599 unsubsidized.
Apple generally doesn’t release cheap devices, as evident by their current product line-up. A low-cost iPhone would have to sacrifice the Retina display, and would probably have “last-years” specs. Bloomberg’s source claims that the device will be one-third smaller than the current iPhone, but will likely use similar components.
Apple is supposedly also working on a dual-mode iPhone that can work on both GSM and CDMA carriers without having to switch SIMs, making it easier for users to change networks using built-in software.
Apple could very well be testing the above internally, but there is no guarantee that it will make it to market if it doesn’t meet Job’s high standards.