The theory that iPhone 5 will be unveiled in September is gathering force by the day. A Morgan Stanley analyst has said Apple will begin the production of iPhone 5 in mid-to-late August, after apparently holding meetings with iPhone component makers in Taiwan last week.

Analyst Katy Huberty said Apple’s next iPhone will begin production in mid to late August and that the launch of the next generation iPhone could happen late in the third quarter, AppleInsider reported. Huberty revealed this in a note to clients after possibly talking to Apple's supply chain links in Asia, adding credence to earlier rumors that iPhone 5's full-scale commercial production was slated to begin in July/August.

The analyst also seemed to endorse the idea that a lower-priced iPhone 4 would hit the market soon as well. There have been talks suggesting that iPhone fans can now look forward to a surprise double offering from Apple, the iPhone 5 and a 'Lite' version of iPhone 4. The Lite version will have smaller and cheaper hardware components, and will be available at a smaller price, according to reports.

The iPhone 5 release date has been a hotly debated topic in recent past as Apple uncharacteristically delayed the launch of the next iPhone model at the annual June Developers’ conference.

Most observers now think the device will arrive in September, while some still hold on to the idea that it will be only in early 2012. They point out that Apple is giving final shape to iOS 5, its latest operating system, and the next iPhone will be delayed until the new OS rolls out.

A Bloomberg report has quoted two sources, who are familiar with the product, as saying that iPhone 5 will be unveiled in September and that it will have a smarter chip and a better camera, among a host of other bells and whistles.

According to analysts the iPhone 5 will come pre-loaded with the iOS 5. Apple fans were dejected that the tech giant broke with tradition this year and refrained from saying anything about the next generation iPhone in its annual Worldwide Developers Conference (WWDC).

Critics mused over Apple losing ground to a plethora of Android OS-based devices which are slated for arrival in the summer. Apple has already said the iOS 5 will hit the market in July, so it is believed that the next generation iPhones will come pre-loaded with the latest operating system, which has been enriched by at least 200 new features.

The latest report suggest that rather than choosing an early 2012 release date, Apple could unveil its best product as early as September, which will also help them cash in on some brisk holiday season sales. Waiting till 2012 would lead to several Android OS-based phones overtaking the iPhones in terms of features, frill and whistles. The competition has already got a lot tougher for Apple, and the arrival of Google’s Nexus 4G would all but annihilate Apple if it still decided to go ahead with iPhone 4.

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