Apple is already working on the development of the second-generation iPhone, as confirmed by Apple CEO Steve Jobs in September, but the new iPhone may be ready for the new year.

A report on SmartOffice claims the company may introduce the next-generation of the device as soon as January, when it claims the company may debut iPhone 2.

Steve Jobs: Apple working on iPhone 2

Apple has already spoken to manufacturing partners in Asia about the next generation of the iPhone, the report claims, observing: "major software and hardware changes are expected to be introduced to cater for non-US markets such as Europe, Asia and Australia."

Apple iPhone - the definitive UK review

The report puts forward what could be no more than a wish list of potential improvements: GPS, expanded WiFi capability and "the ability to sync with email servers," are all on the road map, the report states.