Rumours are circulating that Apple is looking to launch a low-cost iPhone this summer.

Reports citing Chinese-language newspaper The Economic Daily News suggest that two Taiwanese chipmakers are in talks to produce components for a new iPhone model that would begin shipping in June.

Industry pundits have long suggested that Apple could be working on a low-cost 'iPhone nano' that would sacrifice some of the features and capacity of the current iPhone 3G in exchange for a lower price.

It is believed that Apple could gain customers at the low end of the mobile phone market, and increase the iPhone's market share.

A comScore report issued last year suggested that the iPhone 3G was already expanding its reach into lower income groups that had previously avoided smartphones.

Recent analyst reports have said that the cheaper device may be geared towards the Asian markets rather than the US, where the company sells two iPhone models through carrier AT&T.

No mention of a new iPhone model was made during Apple's keynote address at this year's Macworld Expo. The company typically releases information on new iPhone handsets during the January Expo or at its annual Worldwide Developer Conference in June.

The iPhone and iPhone 3G models were launched in the last days of June, shortly before the company's financial quarter closed.