Apple is reportedly working on a new line of iPhones, specifically tailored to take on cheaper phones using Google's Android. Citing a source who has seen the prototype, Bloomberg reports that one iPhone model would be "cheaper and smaller than the most recent iPhone." The new model is described as being one-third smaller than the current models.
The phone is not the only thing getting smaller- Apple is looking to drop the price and customer commitment too. Bloomberg says that Apple wants to sell the new model for $200 without requiring the user sign a contract. Typically, wireless carriers require customers sign a two-year or some time a three-year contract in order to get a discount on a phone.
Reiterating rumors that have been around for some time, the report also says that Apple is working on a dual-mode iPhone that would work with GSM and CDMA networks.
Verizion wireless began selling the iPhone 4 today. Anylysts are predicting that the carrier could sell about 8 million iPhones in 2011.