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Apple is preparing a cut-price, slimmed down edition of the iPhone to compete with mid-range Android powered handsets, it has been reported.

According to Bloomberg, the micro-sized iPhone will retail for a wallet-friendly $200, about £125 sans contract.

If true, this would position it in a head to head challenge with the likes of the HTC Wildfire and lower end Samsung Galaxy-branded phones.

Manufacturing the so-called iPhone Nano at a cheap price point is feasible because Apple plans to reuse components from current and older gen devices, which have since dropped dramatically in cost.

A source who claims to have seen the handset told the financial news provider that that parts expected to feature include the processor and display featured in the iPhone 4.

Other specs are thin on the ground, but it’s also claimed that the phone, which is about a third smaller than the iPhone 4, will dispense with a home button in favour of a touchscreen only user interface.



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