“Apple Inc. plans to sell a smaller, cheaper version of the iPhone as soon as this year, said a person familiar with the plans, part of a push to gain customers in developing nations,” Olga Kharif and Adam Satariano report for Bloomberg News.

“Apple, which had been working on a more affordable smartphone since at least February 2011, is weighing retail prices of $99 to $149 for a device that would debut in late 2013, at the earliest, according to the person, who asked not to be named because the negotiations are private,” Kharif and Satariano report. “Apple has spoken to at least one of the top U.S. wireless carriers about its plans, the person said yesterday.”

MacDailyNews Take: If true – and with the WSJ and Bloomberg now on the case, it’s likely (the laggard NY Slimes should be along eventually) – Google’s one claim to fame, profitless unit share, is about to go “Poof!” And, you can bet that if Apple enters the pre-paid phone market in emerging markets, they most certainly will have margins and they will make a profit on each device sold.

Kharif and Satariano report, “Executives at Apple have been particularly interested in building a lower-cost model with less-expensive components as a way to appeal to customers in emerging markets, another person has said… The device would use cheaper parts and may be smaller than current models, people familiar with the plans said. Apple was also considering a more versatile version that would work on multiple wireless networks, according to people who were briefed on the plans.”

Read more in the full article here.

MacDailyNews Take: The trick – and it’s not too difficult – will be for Apple to make a pre-paid iPhone model that will delight customers in emerging markets, but not entice many current iPhone users.

Apple can do this by delineating the models based on screen sizes and, to a lesser extent, resolution (Retina displays) and/or features (for example: Siri).

Imagine a modern day 3.5-inch iPhone 3GS (with a faster processor, better battery, thinner screen, thinner and lighter body) as the pre-paid iPhone and an iPhone family for carrier-subsidized markets that features screens from 4-inches and larger with Retina displays, state-of-the-art cases (Liquidmetal?), Siri, etc. There would be little cannibalization to worry about with such a clear-cut delineation between flagship iPhones (“iPhone Pro”) and pre-paid models (“iPhone Mini” – don’t call it “iPhone Air,” that would give it too much cachet).

Related articles:
WSJ: Apple prepping less-expensive iPhone – January 8, 2013
Apple to launch low-cost iPhone with 5-inch display for emerging markets in 2H13, sources say – January 8, 2013
Barclays: Cheaper iPhone for emerging markets ‘key’ for Apple – December 4, 2012