Apple will release a second-generation, lower cost iPhone in September for an iPod-like price of $249-299 - if a Chinese-language newspaper report citing Taiwanese industry moles is to be believed, that is.

The story - relayed by local newssite DigiTimes - goes along these lines: supplier Wintek has been contracted to make touchscreens for the new product. Wintek is already producing samples.

Said insiders claim the screens are for the much-rumoured second-gen iPhone, but there's no evidence to back up that claim.

In fact, we're sceptical. For starters, the iPhone's screen is believed to come from Germany's Balda, though that doesn't mean Apple wouldn't look elsewhere for a cheaper panel for iPhone 2.0.

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But the biggest niggle is the alleged price - half of what Apple and AT&T are asking for iPhones today. And we're expected to believe this massive reduction is going to take place a mere three months after iPhone 1.0 was released? We think not.

Wintek may be making screens for a future Apple product. It may even be working on displays for the iPhone family. But our money's on a next-gen iPod - quite possible the long-awaited widescreen video-oriented model, now forgotten or at least way overshadowed by the iPhone hooplah.

That's a product that might well debut in September - a traditional time for iPod updates - for $249-299.