Whilst all the talk and rumors have been around the iPhone 5 and a possible lower priced iPhone 4S targeting the prepaid global market, it looks like Apple has gotten their Asian manufacturers ready to start production of an 8GB iPhone 4.
It is Reuters that are reporting the story, citing two people with knowledge of the matter. According to them Apple have started manufacturing the smaller iPhone 4 with 8GB flash memory and that it will be ready for launch within weeks.
When Apple first launched the iPhone 4 they chose to keep the smallest model, the 8GB one, the same as the previous model iPhone 3GS, making the iPhone 4 available only in 16GB and 32GB versions. If these sources are correct we could be seeing the iPhone 4 8GB replacing the 3GS, and perhaps Apple chooses to go with pretty much the same strategy, replacing the top two iPhone 4 models with the new iPhone 5 as well.
It is widely believed that Apple will at some point be delivering a lower-end iPhone aimed at the largely untapped but smartphone hungry emerging markets, which includes amongst other China. These markets are dominated by prepaid solutions instead of the more traditional contract smartphones that we are used to, so Apple would have to get the overall cost of their iPhone down to a more affordable price to buy outright.
Sources in the article still believe that even an 8GB iPhone 4 will still be too expensive to really make a splash in this market, so the belief is that Apple will still have to bring out a more stripped down version, unless of course they are able to significantly reduce the production cost of the current model.
Apple has of course made no comment in regards to these rumors, and the sources wish to stay anonymous as the information is not yet publicly available.