Apple developing smaller iPhone

Is Apple selling out?  Or are they just being smart?  Bloomberg is reporting that Apple, Inc. is working on a smaller, cheaper iPhone model to compete with the more affordable Android handsets.  They also say that Apple is looking to sell this new device for around $200 unsubsidized.  Additionally, Apple could be working on technology that makes it easier to use the iPhone on multiple wireless networks.  This could be the SIM-less iPhone that was rumored months ago.  So who would have thought a couple of years ago that iPhone would be chasing Android.  Whatever the case, Apple seems to have taken note of Google’s pace, and they’re adjusting rather intelligently.  Finally, Apple is shrinking their ego, and responding to market adjustments.