Apple is planning to create a smaller iPhone that would also be cheaper (since smaller) than the iPhone 4. It will be about $200. But, it doesn’t include a contract. In addition, this gadget is creating a lot of buzz this past few days.

They are working on this to help the Cupertino-based company in its battle against Android handsets. It was reported that the new device will be about 1/3 smaller than the latest iPhone 4.

Reliable sources said that Apple is developing a technology that makes it easier to use the iPhone on multiple wireless networks. However, it was already applied on the current Verizon iPhone that it carries a Qualcomm chip which had that capability.