HONG KONG - Apple Inc's next-generation iPhone will have a faster processor and will begin shipping in September, three people with direct knowledge of the company's supply chain said.

The production of the new iPhone will start in July or August and the smartphone will look largely similar to the iPhone 4, one of the people said on Wednesday.

The iPhone - introduced in 2007 with the touchscreen, on-demand application template now adopted by its rivals - remains the gold standard in the booming smartphone market.

Reports on the timeline of the new iPhone launch vary, though it is largely expected that Apple will likely refresh its iPhone 4 later this year.

The sources declined to be identified because the plans for the new iPhone were not yet public. An Apple spokeswoman in Hong Kong was not available for comment.

The iPhone is one of Apple's most successful products, with more than 16 million sold in the last quarter of 2010 and the product accounted for more than a third of the company's sales in the quarter.

The current iPhone 4 was launched by Apple Chief Executive Steve Jobs in June last year and began shipping the same month.

Apple sources many of its components from Taiwan-based suppliers, many of whom are expected to benefit from an uptick in sales as some of them rely on the US-based company for about 20-40 percent of their business, said Vincent Chen, an analyst at Yuanta Securities.

"For some suppliers, Apple is their cash cow, or their bread and butter," Chen said.

"With all these versions being launched so frequently, it will be the so-called low-margin suppliers, such as those that assemble the phones, who will benefit the most."

Suppliers to the new iPhone include camera module maker Largan Precision Co Ltd, touch screen panel maker Wintek Corp and case maker Foxconn Technology Co Ltd, two of the people said.

The companies would begin production either in July or August before shipping the components to Hon Hai Precision Industry Co Ltd, the flagship of Foxconn Technology Group, for assembly, they said.

Officials at Largan, Wintek and Foxconn declined to comment.

On Wednesday, Largan's shares ended up 3.7 percent, Hon Hai rose 4.3 percent and Foxconn rose 6.6 percent.

Apple, a big purchaser of touch screen displays and flash memory, is also dependent on Japan for some of its key components, sparking concern that the disruption due to the crisis there may hurt its gross margins.

Apple is expected to report another spectacular quarter on Wednesday, tempered by growing caution over how supply constraints will squeeze margins and restrain iPhone and iPad sales.

Reuters