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Apple’s No Contract Smaller iPhone Will Cost $200 ?

According to Bloomberg,Apple may be working on a smaller, cheaper iPhone that will cost $200 without a contract.
One version would be cheaper and smaller than the most recent iPhone, said a person who has seen a prototype and asked not to be identified because the plans haven’t been made public. Apple also is developing technology that makes it easier to use the iPhone on multiple wireless networks, two people said.

The lower price phone would let Apple capture more market share in its competition with Android.

The prototype is one-third smaller than the iPhone 4 according to an individual who saw it last year. While Apple has aimed to unveil the device near mid-year, the introduction may be delayed or scrapped, the person said. Few Apple employees know the details of the project, the person said.

About two years ago rumors circulated about an iPhone nano that would be released in June of 2009; however, the rumors never materialized.

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