The Wall Street Journal reports that Apple is indeed preparing a new iPhone for a launch during the third quarter of this year, with an initial production target of 25 million units through the end of the year.

Quote:
"Apple's sales estimates of the new iPhone is quite aggressive. It told us to prepare to help the company meet its goal of 25 million units by the end of the year," said another person at one of Apple's suppliers. "The initial production volume will be a few million units... we were told to ship the components to assembler Hon Hai in August."

Countering claims that the next-generation iPhone will be nearly identical in appearance to the iPhone 4, the Journal's sources indicate that the new device will be "thinner and lighter" and that Apple's manufacturing partner Foxconn/Hon Hai is having difficulties with yield rate on the new device due to it being "complicated and difficult to assemble."

Quote:
Two of the people, however, cautioned that shipments of the new iPhone could be delayed if Hon Hai can't improve its yield rate as the new iPhone is "complicated and difficult to assemble."

Reports over the past few months have been pointing to a September release for the next-generation iPhone, which has been said to carry Apple's A5 processor found in the iPad 2, an 8-megapixel rear camera, and a baseband chip from Qualcomm to support both GSM and CDMA networks.