Smaller iPhone, Anyone?

The last rumors says that Apple is working on new versions of the iPhone that are aimed at slowing the advance of competing handsets based on Google's Android software, according to people who have been briefed on the plans.

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.

Chief executive officer Steve Jobs, who remains involved in strategic decisions while on medical leave, aims to narrow the price gap that has made phones running Android more popular than iPhones. Google's share of the global smartphone market more than tripled to 32.9 per cent in the fourth quarter, eclipsing Apple's 16 per cent, according to Canalys.

Apple has considered selling the new iPhone for about $US200 in the US, without obligating users to sign a two-year service contract, said the person who has seen it. Android phones sell for a range of prices at AT&T, Verizon Wireless and other US carriers, and typically come with agreements that include a fee for broken contracts. The iPhone 4, sold in the U.S. by AT&T and Verizon Wireless, costs $US200 to $US300 with a contract.

Natalie Kerris, a spokeswoman for Apple, declined to comment.