Facing newly-robust competition on the smartphone front, consumer-electronics heavyweight Apple (AAPL) is reportedly planning to launch a low-cost version of its blockbuster iPhone device for China and other emerging markets in the second half of 2013.

The report comes as Apple has come back to earth from a meteoric rise, with its share price tumbling 20% in the past three months amid a number of stumbles.

According to Digitimes, a tech industry paper based in Taiwan, the company is planning to roll out a low-cost iPhone that will feature a larger display and a brand new exterior design.

The cheaper iPhone is set to launch in China and other emerging markets in the second half of this year, the report said, citing supply-chain sources.

Late last year analysts at Jefferies (JEF) weighed in on a potential low-cost iPhone, predicting it would launch in June or July and with a price point of $200 to $250.

“Our analysis indicates that while Apple would gain unit share, revenue/EPS would remain largely unchanged and GM [gross margins] would fall,” Jefferies said in a note to clients at the time.

Apple may have been emboldened by strong sales of its iPad mini in China and other fast-growing markets, Digitimes reported. The move may have also been paved by a new family of chipsets being launched by mobile chip maker Qualcomm (QCOM).

Apple has been hit by increased competition in the smartphone world, especially from South Korean electronics giant Samsung and its Galaxy line of phones.

In October, Apple disclosed a weaker-than-expected 24% rise in fiscal fourth-quarter profits. Revenue in the Asia-Pacific region grew 15% to $7.89 billion.

Shares of Cupertino, Calif.-based Apple rallied 0.73% to $527.37 Tuesday morning. While Apple has rallied 24% over the past 12 months, it remains well off record highs of $705.07 set in September.

Follow Matt Egan on Twitter @MattMEgan5