Apple Inc suppliers will begin production of its next-generation iPhone in July this year, with the finished product likely to begin shipping in September, three people familiar with the matter said on Wednesday.

The new smartphone will have a faster dual-core A5 Processor, larger screen but will look largely similar to the current iPhone 4, one of the people said. They declined to be identified because the plans were not yet public.

The iPhone -- introduced in 2007 with the touchscreen, on-demand application template now adopted by its rivals -- remains the gold standard in the booming smartphone market.

Reports on the timeline of the new iPhone launch vary, though it is largely expected that Apple will likely refresh its iPhone 4 later this year.

The sources declined to be identified because the plans for the new iPhone were not yet public. An Apple spokeswoman in Hong Kong was not available for comment.

The iPhone is one of Apple's most successful products, with more than 16 million sold in the last quarter of 2010 and the product accounted for more than a third of the company's sales in the quarter.

The current iPhone 4 was launched by Apple Chief Executive Steve Jobs in June last year and began shipping the same month in 2010.

Apple sources many of its components from Taiwan-based suppliers, many of whom are expected to benefit from an uptick in sales as some of them rely on the U.S. company for about 20-40 percent of their business, said Vincent Chen, an analyst at Yuanta Securities.

"For some suppliers, Apple is their cash cow, or their bread and butter," Chen said.

"With all these versions being launched so frequently, it will be the so-called low-margin suppliers, such as those that assemble the phones, who will benefit the most."

Suppliers to the new iPhone include camera module maker Largan Precision Co Ltd , touchscreen panel maker Wintek Corp and case maker Foxconn Technology Co Ltd , two of the people said.