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Apple to launch low-cost iPhone

$200 handset will be a third smaller than current model

Apple is thought to be preparing to launch a a low-cost version of the iPhone.

According to Bloomberg, which cites a source that claims to have seen the device, the iPhone Mini will be around a two thirds of the size of the existing iPhone and does not feature a 'home' key. It is likely to cost around $200 in the US, although no speculation was made on UK pricing.

It is thought the smaller handset will be available with a "universal" SIM that allows users to switch between networks without having to remove on SIM and insert another. Furthermore, it is likely to be made available on a Pay As You Go (PAYG) basis rather than 18-month or two-year contracts.

Apple hopes the low-cost device would help rival the success of Google Android, which as well as targeting the high-end smartphone market, has become popular with low-cost devices that offer many of the same functions as smartphones.

"Instead of targeting 25 percent of the global mobile-phone market, Apple would be going after 100 percent," Charlie Wolf, an analyst at Needham & Co, told Bloomberg.

The source also revealed that Apple initially aimed to unveil the device mid-way through 2011 and very few Apple employees know the 'iPhone mini' exists.

See also: Apple eyes pay-by-iPhone feature

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