After launching a smaller, cheaper version of the popular iPad last year, Apple is looking to up the ante in smartphones too. The world’s biggest technology company will launch the much-speculated cheaper iPhone this year, according to a report by ETrade Supply.

As per a source of ETrade Supply in Foxconn, which manufacturer iPhones, Apple is gearing up to launch a budget smartphone. Last year, ETrade Supply sources had leaked accurate information about upcoming Apple products, including the front panel of iPhone 5.

 Recently, JP Morgan analysts Gokul Hariharan and Mark Moskowitz said that Apple’s cheaper iPhone is unlikely to be a budget device. Rather, it will be a mid-range product that will hurt the business of Samsung Galaxy series by capturing 25% of the segment within a year of launch.

As per technology blog Tactus, a leaked Apple internal document reveals that the cheaper iPhone would be priced approximately $300-$400. According to an alleged leaked image of the cheaper iPhone, the upcoming device will have a glossy plastic back.

 Speculation is also rife that Apple will launch the cheaper iPhone as well as the upgraded version of iPhone (likely to be called iPhone5S)