Apple is planning new cheaper models of iPhone smartphones to stem the advance of Android smartphones, according to a Bloomberg report.
Citing unnamed sources who Bloomberg claimed had been "briefed on the plans", the report claims that Apple is planning a smaller and cheaper iPhone.
The Bloomberg report also said that Apple is working on technology which would make the iPhone easier to use on multiple wireless networks, although they didn't elaborate further.
Android smartphones have increasingly gained ground in the market, helped by the introduction of lower end smartphones, cheap enough to be available on mobile network contracts without an up front charge for the hardware.
The move would also put Apple on collision course with the world's largest phone maker Nokia. Nokia CEO Stephen Elop is set to announce the firm's strategy for revitalising the firm's smartphone business, widely tipped to involve a partnership with Microsoft and Windows Phone 7.