The company has long been rumoured to be working on some sort of cut-down device, so the reports are not without foundation. Bloomberg News reports that the company has been working on the device since January 2011 - which may have been the source of the earlier rumours.
Citing a person familiar with the plans, Bloomberg wrote that Apple has been particularly interested in building a lower-cost model with less-expensive components as a way to appeal to customers in emerging markets.
Apple has traditionally stuck fast to the high-end market for all its products, but the bulk of the mobile market is low to middle end products, and Apple's arch-rival Samsung is increasingly dominating that market as Nokia's star wanes.
Apple was also considering a more versatile version that would work on multiple wireless networks, according to people who were briefed on the plans.
On the web: Bloomberg News
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