Apple working on cheaper, carrier agnostic iPhones

In what can be viewed as a acknowledgment of its weakening position in the smartphone market, Apple is working on lower cost and smaller versions of its iPhone. Sources told Bloomberg that the company is also working on technology that would allow the device to work across multiple networks.

One device would apparently be a smaller version of the current iPhone from those that have seen it, at about two-thirds the size of the iPhone 4, and without a home button. The device would be sold for about $200 without the need for a contract. It is not clear however whether the device would come unlocked making it capable to be used across any network.

Another version would be dual mode, meaning it would work on both GSM and CDMA networks. Such a device would especially be beneficial to those on the Verizon network: the carrier's use of CDMA limits the device's use outside of the US, where by and large the standard is GSM.

Also in the works is universal SIM technology, where the iPhone user would not need to change the SIM itself in order to switch from one GSM network to another. If true, that development may be an indication that Apple may be willing to loosen its tight controls on what networks its phones appear on.

Evidence on such an effort may be found in a patent application first publicized by Apple enthusiast site AppleInsider on Wednesday. The patent calls for a system within iTunes where carriers would essentially bid through iTunes to provide cellular service to iPhone users.

CEO Steve Jobs appears to be fully involved in the project, even though he has been on medical leave since last month. Original plans apparently had the device releasing mid-year -- likely around the time Apple has historically updated the iPhone -- but Bloomberg seemed to indicate that those plans had either been delayed or scrapped.