Apple iPhone 5 in production?
Report Confirms Apple Producing Budget 8GB iPhone 4 Alongside iPhone 5

Apple is developing a new 8GB budget version of its current iPhone 4 handset, company sources say.

Reuters reported that "two people with knowledge of the matter" had confirmed to it that Apple's Asian suppliers had begun manufacturing a new budget version of its current iPhone 4.

It went on to clarify that the device's 8GB flash drive is currently being manufactured by a Korean company, but would not name it.

The new affordable smartphone will reportedly be nearly identical to its high-end equivalent. In keeping with recent rumours, the anonymous source said the only changes planned would see Apple improve the device's touch screen, antenna and camera.

The same sources allegedly revealed that alongside the budget iPhone 4, Apple is planning to release its next-generation iPhone 5 smartphone at the end of September.

Reuters reported that its sources had confirmed that Apple had told its manufacturers, Hon Hai and Pegatron, to prepare production for 45 million units.

Reuters said its sources requested anonymity, fearing legal retribution from Apple. The company has mounted lawsuits -- some ending in jail sentences -- against employees who leak information regarding its future devices.

Apple declined requests for comment on Reuters' recent report.