The perennial iPhone rumour continues to ring, with DigiTimes claiming the device will be manufactured by Foxconn Electronics.

Foxconn is the registered name of Hon Hai Precision Industry. The report (which cites China's Commercial Times) claims the company will manufacture 12 million units of the new device, which will ship in the first half of 2007.

However, Foxconn has refused to comment on the report, which it terms "market rumour".

Analysts expect the introduction of such a device – which would meld the features of a mobile phone with those of an iPod – would add at least $1.5bn (about £795m) in annual sales on to Apple's bottom line.