Is Apple Working On A Cheaper iPhone?

According to Bloomberg reports, Apple is apparently working on a new small as well as cheap iPhone in order to compete with Google based Android phones whose low prices are posing a serious threat to the iPhone markets. This present rumor is an extension to the already existing rumor that Apple wants to develop a mini iPhone on the lines of iPod minis. Apparently, someone has already seen the prototype of the smaller iPhone and the reports are that the smaller one is two-thirds in size when compared to its parent phone and the home button is also amiss on the smaller one.

Sources also report that Apple would be selling these phone for 200$ and also there would be no contract commitments attached to this phone.

Watch out Androids!