Apple preparing £125 I-Phone Nano

The new model would retail alongside the forthcoming i-Phone 5, for around $200 (£125),Bloom Berg said, citing citizens who had been briefed on the strategy. Apple was working to awards a mid year release date, one said, but the schedule may have changed or been scrapped.

A prototype seen by the identical source previous year was two-thirds the previous i-Phones and had no home button.

Apple strategy to make cost savings by resusing components, excluding the processor, from the               i-Phone 4, which are now cheaper than when it was first released previous June. The i-Phone 5 is expected to incorporate an new, quicker, more expensive processor.

There has been speculation that Apple would release an "i-Phone Nano" for years, but today's report is the most solid yet. The strategy would be a reiterate of how it developed smaller, cheaper versions of the i-Pod as other manufacturer entered the market.

It is currently facing a strong challenge from Google Android devices in the smart phone marketplace. They are typically cheaper, and have already eclipsed Apple in terms of market share.

WORLD TECHNOLOGY {WT}