Anonymous sources tell both Wall Street Journal and Bloomberg Apple will reveal a cheaper, smaller iPhone by the end of 2013 as it bids for marketshare in emerging markets. 

Costing around $100-150, the cheaper iPhone would also help Apple take back share lost to Android-powered competition. According to Gartner Android dominates the Q3 2012 smartphone arena with 72.4% OS share, while iOS dropped from 15% in Q2 2012 to 13.9%. 

How can would Apple lower iPhone costs? Polycarbonate plastic construction (instead of aluminium) and internals scrapped from oler iPhone models. 

Apparently the idea of cheaper smartphones is not new to Apple-- the company has been considering the idea since "at least" 2009, even if the late Steve Jobs was adamant the company offered a relatively small number of products for high-end consumers. The times are a-changing though, and now Apple even has an iPad mini to alongside bigger iPad models. 

Apple predictably refuses to comment on either Bloomberg or WSJ reports. 

Go A Low-Priced iPhone Awaits (WSJ.com)

Go Apple Said to Develop Cheaper iPhone for Late 2013 (Bloomberg)