Asian suppliers have already begun manufacturing a lower-cost version of the iPhone 4, which has a smaller memory capacity of 8 GB, reports Reuters.
A Reuters source also said Apple is planning to launch the iPhone 5 at the end of September, which is similar to other leaks citing a September or October launch.
The manufacturers of the iPhone 5 have been instructed to prepare for a production run of up to 45 million units in total. The phone will be built by Hon Hai and Pegatron, said an anonymous Reuters source.
Apple sold 20.34 million iPhones in the second quarter and says it has not yet scratched the surface in sales in China.
While Android phones have won a 52 percent share of phones sold in the U.S. in Q2, the iPhone 4 is the most popular single smartphone, says the NPD Group. The two-year old iPhone 3GS, now at $49 (down from $99) is the number two most popular smartphone in the U.S., reports AppleInsider.