Apple is preparing at least two versions of its forthcoming iPod mobile phone, popularly known as the 'iPhone', according to reports from component suppliers in Taiwan and Japan.

A 3G version and a GSM version of the iPhone will be available by March 2007, sources have told analysts in Taipei.

Apple's suppliers will make approximately 12 million phones during 2007, nine million GSM versions and three million 3G versions, a Taipei-based analyst revealed to vnunet.com, on condition of anonymity. 

The choice of different component suppliers for each model reinforces earlier claims that the two products will be substantially different.

Apple is believed to be working on a smartphone with wireless internet, a full keyboard and video playback, as well as a simpler music phone, according to Prudential Equity Group analyst Jesse Tortora. 

These two products appear to correspond respectively to the 3G and GSM versions.

Based on component orders reported by suppliers to analysts, Apple is gearing up to ship as many as 4.2 million iPhones in the first three months of production.

Earlier reports had said that quantities might be limited initially owing to concerns over battery life.

Apple has not yet formally announced the long-rumoured music-playing mobile phone or its official name.

However, the company is reported to have registered 'iPhone' as a trademark in several countries, and has controlled the iPhone.org internet domain for many years.

A number of companies have previously marketed products under the name 'iPhone', including Surecom and Vocaltec.

The iPhone.com domain name is registered to VoIP service reseller The Internet Phone Company. However, this address merely redirects visitors to the company's main website, suggesting that it could easily be reassigned.

Speculation over the official announcement of iPhone centres on the MacWorld Conference and Expo in January 2007, at which Apple chief executive Steve Jobs is likely to reveal details of new products.

According to earlier reports in the Taiwanese press, the lead manufacturer for Apple's forthcoming phones will be iPod maker Foxconn, which will make 12 million units in 2007.

If correct, these reports imply that Foxconn will make the 3G and GSM models described by component suppliers.

Foxconn announced earlier this week that it will invest US$1.2bn in building a huge new manufacturing centre in northern China. Foxconn is the trading name of Taiwan-based Hon Hai Precision Industry.

Recent forecasts predict mobile phone sales of more than one billion next year, and digital music player sales of 130 million.

Based on these figures, Apple's iPhone would take at least one per cent of the mobile phone market, or just under 10 per cent of the digital music player market, assuming that 12 million units were sold during 2007.

In the five years since Apple introduced its iPod music player, initially as a means to help promote sales of its computers, close to 70 million of the devices have been sold.

Apple has also profited from 1.5 billion songs sold through its iTunes internet music store.