Report: Apple planning smaller, cheaper iPhone without contract

iPhone Nano, Cheaper and Smaller iPhone

The rumored smaller version of the iPhone (possibly the iPhone Nano) has been creating a lot of buzz these past few days, so here’s something that might get you excited.

Bloomberg is reporting that, according to unnamed sources, Apple is working on a smaller and cheaper model of the smartphone to help the Cupertino-based company in its battle against Android handsets. The new device is about a third smaller than the iPhone 4, and would be marketed for about $200 without requiring a contract.

“Chief Executive Officer Steve Jobs, who remains involved in strategic decisions while on medical leave, would use lower prices to widen the iPhone’s appeal and keep it from losing further ground to Android devices. Less expensive iPhones may also ratchet up pressure on Nokia Oyj, whose Symbian software is especially popular in Europe and some developing markets.”

However, according to the report, the device may be scrapped or delayed, and that only a few Apple employees know the details of the project.

Sources familiar of the plans said “Apple also is developing technology that makes it easier to use the iPhone on multiple wireless networks.” That however, is not really news: it was already reported that the current Verizon iPhone carries a Qualcomm chip that had that capability.