Taking the rumor mill reporting to the next level, Katy Huberty with Morgan Stanley is calling for a late September launch of the next-generation iPhone, with production kicking off in August. The time-frame jibes with various tidbits we’ve been hearing from Asian component suppliers for some time.

But now it’s said that It’ll be two phones, speculates Deutsche Bank’s Chris Whitmore in a note to clients this morning. One will be a modest upgrade sold contract-free and unlocked at aggressive price points, the iPhone 4S, and the other is a substantial, superphone upgrade, presumably to be named the iPhone 5. Whitmores rationale:

With Nokia and RIMM struggling, the time is right for Apple to aggressively penetrate the mid range smart-phone market (i.e. $300-500 category) to dramatically expand its [total addressable market] and market share.
One problem: The $349 price point Whitmore mentioned for the iPhone 4S ain’t exactly what we’d call inexpensive, especially compared to the sub-$200 Android cheapos, like the $150 Huawei Ascend contract-free smartphone.

With so much competition in the market, it seems like apple can’t afford to follow it’s policy of one phone a year! It can most likely be that they will release 2 different models to suit the customers need and pockets. iPhone has always been a thing of high class, may be they want to make a cheaper version for the others so that they can take control over the market and give a tough fight to the other players.