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New low-cost iPhone reportedly going into production in February

Handset will be comparable in size to the 4.7-inch iPhone 8, Bloomberg reports.

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The iPhone lineup may soon get a low-cost addition that's similar in size to the iPhone 8.

César Salza/CNET

Apple is reportedly ready to return to the low-cost phone market after an absence of four years. The company plans to begin production on a cheaper iPhone in February, with an official unveiling coming as early as March, sources tell Bloomberg.

The handset -- believed to be comparable in size to the 4.7-inch iPhone 8 from 2017 -- would be Apple's first low-cost smartphone since 2016's $399 iPhone SE.

Planning for the new handset was reported in September by Japanese news outlet Nikkei. The phone will share most components with the current lineup of iPhones and use a cheaper LCD display to keep the cost low, according to the Japanese paper.

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The addition of a cheaper handset to the iPhone lineup appears designed to win customers back from competitors like Huawei. Sales of the iPhone handset, which typically represents about half of Apple's revenue and a large share of its profits, fell nearly 10% in the fourth quarter to about $33 billion. The previous quarter, they slid 12%.

Apple didn't immediately respond to a request for comment.