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iPhone 4S cheap version coming in September?

New reports are fuelling rumours there will be not one but two iPhones released this year: a next-gen iPhone 5 and a cheaper 8GB iPhone 4.

New reports are adding fuel to the fire of rumours that there will be not one but two iPhones released this year: a next-generation iPhone 5 and a cheaper 8GB version of the iPhone 4.

The bite-sized iPhone 4 -- possibly called the iPhone 4S -- is already rolling off production lines in Korea and will launch within weeks, Reuters reports. Blimey, that's soon.

Word on the street is the new phone won't be physically smaller, but will have lower specs to make it cheaper. It's likely to have 8GB of storage built-in, as opposed to the current model's 16GB and 32GB options.

A cheaper version of the iPhone 4 could shift phones like nobody's business, especially in emerging markets, and most especially in China. Korean manufacturers Hon Hai and Pegatron are rumoured to have been contracted to knock out up to 45 million phones. 

The smaller model may be called the iPhone 4S to distinguish it from a proper next-generation update. The lower-specced, cheaper iPhone will launch ahead of a full-specced iPhone update, which is expected sometime in September.

The next-generation phone is likely to have a larger touchscreen, an 8-megapixel camera and a curved back.

Supporting other previous rumours, TechCrunch reckons the iPhone 5 will make calls using both the GSM standard used around the world, as well as the CDMA standard used by some networks in the US, India and Japan. That means it's a single phone that can be used all around the world.

According to an anonymous app developer, Apple is testing devices that use both technologies by trying out apps.