More specifically, analyst Ben Reitzes said his sources indicate Apple is readying a new iPhone that will ship in June with an upgraded camera that could deliver big improvements to the iPhone experiences, including both still and video capabilities "with possibly another camera on the front for video chat."
He elaborated by saying Apple could offer a "few iPhone models" with these features and various memory capacities as "high-end" video iPhones that would rival the functionality of Pure Digital's "Flip" digital camcorder line. At the same time, a model similar to the current iPhone 3G without some of the high-end features would be sold at lower prices ($100-$150) with different data plans in order to extend the touch-screen handset to more geographies and to lower income users, according to the report.
Reitzes is likely basing his dual model assumptions, in part, on discoveries within unreleased iPhone code that point to two new and architecturally distinct iPhone-branded devices that are far enough along in their respective development cycles to demand support within the iPhone Software 3.0 update due this summer.
He's also the second analyst in as many weeks to put out a call indicating that iPhone build volumes for the current quarter are up two-fold thanks to orders for multiple new models that would be ready for consumer purchase by the end of June.
Last week, Lazard Capital Markets semiconductors analyst Daniel Amir made similar claims, saying production was due to jump from around 3.5 - 4.0 million units during the March quarter to as many as 8 million units during the June to coincide with the introduction of two new models.
Amir said the high-end version would have video capability, a better camera and 32GB of storage while the low-end version would include less storage, no video functions, and possibly lack Wi-Fi -- a move which could potentially cater to the demands of Chinese wireless carriers.
Reitzes, who also expects Apple to introduce a new ultra-portable device to cater to the netbook market later in the year, raised his pro forma estimates for the Cupertino-based significantly given his view that the company can deliver a robust new product cycle for iPhones in '09 supporting about $10 per share in annualized free cash flow. He also bumped his price target on Apple shares to $143 from $113 while maintaining an overweight rating on the stock.