A report just in from Bloomberg: Apple has begun work on new, cheaper and smaller iPhone models. Sources say Apple will consider selling the new versions, about a 1/3 smaller than the iPhone 4 for $200 without a contract obligation.
If it comes out at all, it will likely be unveiled this summer 2011.
Bloomberg also reported a few rumors circulating about new technology that Apple has in the works.
Rumor #1: Apple is creating “dual-mode” technology so it will be easier to use the iPhone on both GSM and CDMA networks. However it is not likely that this capability will also come in the smaller, cheaper version.
Rumor #2: Apple’s Universal SIM tech is in the works, which would let iPhone users toggle between GSM networks without having to switch the so-called SIM cards that associate a phone with a network.
Rumor #3: Apple is working on redesigned iPhone software that would let customers choose a network and configure their device on their own, without relying on a store clerk or representative of a carrier, according to the person.
According to Canalys, the downmarket iPhone versions phones will compete for marketshare against Android, whose smartphone market has more than tripled to 32.9% in the 4th quarter, eclipsing Apple’s 16%.