People briefed on the matter said Apple is developing a less-expensive iPhone as an alternative to its existing model, the Journal reported Wednesday.
The new phone could resemble the existing iPhone but with a different shell made of polycarbonate plastic rather than the aluminum housing of the current iPhone 5, a source told the newspaper.
Lower-cost phones running Google's Android operating system have cut into Apple's share of the smartphone market, which dropped to 14.86 percent of worldwide device shipments in the third quarter of 2012, down from a peak of 23 percent in the first quarter of the year, the Journal said.
Offering multiple iPhone models would be a departure for Apple, which has sold only one main new iPhone model at a time since the smartphone debuted in 2007.
The iPhone and accessories for it are responsible for nearly half of Apple's revenue, the Journal reported.
A spokeswoman for the company declined to comment on the reports of a low-cost iPhone, the newspaper said.