Apple is considering launching iPhones with larger screens, possibly as big as 5.7in, as well as cheaper models available in a range of colours, over the next year.
Speaking to the Reuters news agency, four people with "knowledge of the matter" claim Apple will be extending its iPhone range to keep pace with rival Samsung, which offers devices with a huge number of screen sizes.
Apparently still under discussion at Apple, the move to larger and cheaper phones further shows how Apple's once dominant position in the smartphone market has been eroded by manufacturers who offer choices across their range rather than a single, high-end device.
"Apple is looking at introducing at least two bigger iPhones next year - one with a 4.7in screen and one with a 5.7in screen," Reuters' sources claim, although they may not arrive until next year.
Samsung overtook Apple as the biggest smartphone maker by flooding the market with a range of prices and screen sizes, headlined by 'phablet' devices such as the 5.5in Galaxy Note 2 and enormous 6.3in Galaxy Mega, which is almost the size of a small tablet.
Despite being the largest iPhone yet, the 4in fifth-generation model launched late last year is one of the smallest smartphones on the market, dwarfed by the 4.5in Nokia Lumia 920, 5in Galaxy S4 and HTC One, and 5.5in Note 2.
Supply chain sources claim Apple will launch two new iPhones this year; the 5S, which will feature fingerprint technology for increased security, along with a cheaper phone available in a range of six colours and expected to be made from plastic rather than aluminium to keep costs down.
Apple is reported to have discussed a $99 (£63) price point for the cheaper model, although it is unclear if this is a SIM-free price or the cost when bought with a contract.
Although launching just one iPhone per year since 2007, Apple has enjoyed success by selling three models at once at various prices; currently the iPhone 4 and 4S are sold at discounted rates alongside the iPhone 5; the oldest model can now be had for free on £15 per month contracts.
When asked about introducing an all-new cheaper iPhone at the AllThingsD conference last month, Apple CEO Tim Cook said it hadn't yet been considered, but "that doesn't shut it off [for] the future...Are we now at a point to serve enough people that we need to do that?"
Reuters claims test production for both the iPhone 5S (expected to keep the 4in screen size) and a cheaper, colourful model will be begin in July, with production ramping up over the summer for a September launch, a year after the iPhone 5 was announced.
One source in Asia said: "Trial production was originally planned to start in June, but the mixing of colours is taking longer than expected as Apple has very high and idealistic standards," adding that 20 million of the cheaper iPhones are expected to ship in the October-December quarter.
Apple is no stranger to different colours causing manufacturing delays, as the white iPhone 4 was delayed by 10 months in 2010/11 because matching the exact shade of white across the glass body and plastic Home button proved difficult.