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Bloomberg has the available details…
The device would use cheaper parts and may be smaller than current models, people familiar with the plans said. Apple was also considering a more versatile version that would work on multiple wireless networks, according to people who were briefed on the plans.
According to these anonymous sources, Apple’s been working on this for a while – since the start of 2011. And it may be aimed at foreign consumers like the Chinese, though it’s hard to imagine they would pass up the opportunity to sell it in the U.S., too.