There have been rumors from various sources that Apple is planning to make cheaper iPhones to compete with smartphones based on the Android operating system from Google. These phones are believed to be specially designed to make a new line of smart phones that can compete with the cheaper Android powered phones.

According to an article published in an Australian magazine, the new line of iPhones being prepared by Apple are smaller than the more recent iPhones. The new model is described to be around one third in size than the other iPhone models. Other than the size of the new line of iPhones, Apple is also planning to cut down on its high end prices as well as customer commitment.

According to reports from the journal Bloomberg, Apple plans to sell the new model at $200 without requiring the user to sign a contract. All wireless carriers require customers to sign a two to three year contract if the user wishes to avail a discount on the phone. Apple is planning to do away with this rule. This could just be a rumor doing the rounds in the industry.

Since Apple has to face tough competition in the market against the other models therefore it is but natural that in order to stay afloat, Apple needs to bring around some innovative technological ideas. Apple is reportedly working on dual mode iPhones that will have the capability to work with both GSM and CDMA networks. This, if proved true, may be the turning point in iPhone technology where a user will get the benefit of availing both the CDMA and GSM networks without having to pay separately for the networks.