Although Apple has stated that it was not interested in low-cost smartphones, the market realities may force the company to introduce at least one model with decreased cost in order to compete with inexpensive phones based on Google Android operating system.

The low-cost Apple iPhone is projected to be smaller than the fully-fledged version and it may also be able to work with two SIM cards seamlessly, a mode popular in developing countries, reports Bloomberg news-agency. The smartphone will utilize a processor, display and other components similar to those used in the iPhone 4, but not more advanced and expensive hardware that is set tom power the iPhone 5, which will allow Apple to sell the device at a lower cost, the report claims.

The inexpensive iPhone, which was previously known as "iPhone Nano", is projected to be sold for around $200 without any contracts, something that will attract cost-sensitive buyers around the world and particular in countries with low-income.

Moderately-priced Google Android-based smartphones got especially popular in Q3 and Q4 2010 and a number of manufacturers recently introduced their second-wave of relatively inexpensive Android smartphones. The market share of Android is growing faster than the market and faster than Apple's iOS and Nokia's Symbian, which makes it a platform to worry about for any market player.

Apple has consistently denied plans to release a low-cost iPhone in the past and even this time the plan may be scrapped to keep sales of expensive iPhone 4 and iPhone 5 at high level even among those, who cannot truly afford such a smartphone. But the dilemma for Apple is that all phones will become smartphones in several years time and for typical users their feature-set may be just enough to keep themselves away from Apple. As a result, in order to grow its market share or even keep it, Apple will have to introduce a more affordable iPhone. The question is whether Apple wants to be one of the biggest suppliers of mobile phones in the world eventually, or whether it will stick with its small market share to preserve its profit margins, just like it does on the majority of the markets it serves.

Tags: Apple, iPhone