Sources close to Apple claim the firm is planning to roll out a new iPhone with 3G and GPS support in 2008.
The new iPhone should help quiet critics who were unimpressed by the 2.5G EDGE technology the first version used.
Apple declined to comment.
Wireless industry observers say the two biggest complaints about the iPhone were the high prices and slow network connections. Earlier this month, Apple slashed the iPhone price by 33% -- a move that seems to have spurred some demand. TheStreet.com reported earlier Monday that the Palo Alto, Calif., company was boosting production targets.
Holdouts waiting for the full-speed 3G iPhone may still be frustrated that the device won't be available this year. But a clearer timeline and the promise of new features could help soothe unhappy Apple fans.
The new 3G iPhone is expected to include features like global positioning for navigation services.