Apple is reportedly designing a smaller iPhone in a bid to more directly challenge Google's Android-powered handsets.

The Apple Inc. logo is seen through raindrops on a window outside New York City's flagship Apple store January 18, 2011. (Xinhua/Reuters File Photo)

The smaller prototype, which was referred to as the iPhone Min by some media, will be somewhere between half the size, or one-third smaller, than the iPhone 4, and it would lack a “home” button.

The new phones would also be cheaper and sold at half of the price of its top seller iPhone 4.

“Apple would sell it at a low price mainly because the smartphone will use a processor, display and other components similar to those used in the current model, rather than pricier, more advanced parts that will be in the next iPhone,” said a Bloomberg article.

It is still unclear when Apple would unveil the iPhone Mini for now. Some media expected it would come alongside the iPhone 5 this summer.

Alternatively, it could debut in the fall so as not to steal any spotlight from the next-generation iPhone, but be ready for the holiday season. (Agencies)

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