APPLE is developing a low-cost version of the iPhone as its battle with Google to control the smartphone market heats up.
Steve Jobs’ company is said to be working on a “nano” version of its premium product which will be around half the size of the iPhone 4.
Mobile carriers could sell on the product for about half the price of Apple’s main line of iPhones.
The smartphone maker, known for closely guarding the development of its products, will continue to work on a new version of the iPhone, which will be sold alongside its smaller cousin.
Technology giant Google has heaped increasing pressure on Apple since the introduction of its Android operating system to the market.
Android, which features on a number of manufacturers’ products, has seen a meteoric rise to become one of the iPhone’s main rivals.
Sony Ericsson last night announced a new Android handset, the Xperia Play, putting further pressure on Apple.
The iPhone and iPad maker could be looking to hit back at the wave of Android products by tapping the midmarket with its cheaper mobile.
Analysts say 2011 could be the year when smartphones moves down into the midmarket, as material costs come down.
Telecoms analyst at Charles Stanley Tom Gidley-Kitchin said: “Apple has the choice of either cutting the cost of its phones to capture that or to come out with a product that could compete at that midmarket level.”
“They’re going to come up against more and more competition, Google is marching on.
“I can see that there’s an argument for a cheaper phone. It shows that Apple is going to compete all over the pitch.”
A spokesperson for Apple declined to comment.