Apple is said to be applying its shrink ray to the iPhone, working on a scaled-down, budget version of its ubiquitous electronic leash.

Bloomberg cites unnamed sources who say prototypes of the mini-iPhone have already been produced. The phone is 33 percent smaller than current iPhones and will use parts that are on par with the iPhone 4, but will lag behind the inevitable next iteration. Aimed for release mid-year, the device would cost $200, with no 2-year contract required.

Bloomberg quotes an analyst who says the device is Apple’s attempt at global domination:

“Instead of targeting 25 percent of the global mobile-phone market, Apple would be going after 100 percent.”

Apple Is Said to Work on Cheaper, More Versatile IPhone Models [Bloomberg]

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