Though rumoured for weeks, insiders with knowledge of Apple’s plans have debunked the possibility that the company will unveil a smaller version of its popular handset. Apple’s engineers are apparently entirely focused on finishing the latest iteration, which should become available in Canada this summer.

The concept of a smaller iPhone first gained traction when published reports suggested plans were already underway to create one, but Apple executives have denied this by saying that a smaller iPhone wouldn’t necessarily be cheaper to make, and might be tougher for users to operate. The reports had even indicated that “N97” was the codename for the smaller iPhone, but this turned out to be untrue, since it was the codename for the Verizon iPhone recently launched in the United States.

Additionally, a smaller screen size would require developers to rewrite their apps to accommodate the smaller display. After having to do that for the iPad, putting developers in that position for another device so soon could be too much. Apple CEO Steve Jobs has already gone on record in considering Google’s Android mobile OS to be “very, very fragmented” and that Apple views its linear design as a strength.

Instead, Apple seems to be more interested in making it easier to control and navigate the device using voice commands. There is also some thought going into using less expensive components under the hood, but nothing is definitive at this point.

A smaller iPhone would be a curious move for a company that now routinely drops the price of a preceding unit when a new one is launched. The iPhone 3GS, for example, is now $99 on a three-year contract with Canada’s carriers.

Despite a solid market share in North America and a burgeoning presence in other countries, the iPhone is still an expensive proposition for users overseas because carriers in most countries don’t offer subsidized phones — meaning there are no contract terms.