Apple manufacturing partner, Pegatron, has reportedly begun production of the latest version of the next generation iPhone at its factory in Shanghai. While this report cannot be verified or ascertained, the timing is right and would allow iPhone 5 to be announced in September or October as has so often been claimed it will.
This will allow Apple to stick to their product cycle by releasing the iPhone 5 nearly a year after iPhone 4S; released in October 2011.
The next gen iPhone is also largely expected to come with a smaller dock connector. While current models have a 30 pin connector, the iPhone 5 is expected to sport a 19 pin connector. This would make all current accessories, and buying a few can be expensive, useless unless Apple decides to sell adapter to allow accessories designed for the 30-pin to be used with the 19-pin dock.
However, it has been speculated that Apple may chip the connector to prevent unlicensed hardware, maybe even cables, being used with an Apple product.
The new connector will save valuable space inside the iPhone 5 by being nearly half the size of the current dock connector, which can then be used for something else. Previous rumors have suggested that the earphone jack will be moved to the bottom of the smartphone and while this may not be the sole reason for making the dock connector smaller, it may be one of the factors. It might also be water resistant.