Has Apple started iPhone production?

Rumours of an Apple-made mobile phone, commonly referred to as the iPhone, have been running hot and cold for months but Chinese-language newspaper the Commercial Times broke the strongest report yet that the appearance of such a device is imminent.

In an article published Wednesday, the newspaper claimed that inside sources at Hon Hai Precision, the Taiwanese manufacturer also known as Foxconn, had received an order for 12 million mobile phone units from Apple. Foxconn manufacturers Apple’s popular iPod music player.

If such an order has been placed, the device is likely to hit the shelves in the first half of next year.

Investment bank PiperJaffray predicted earlier this year that the iPhone would become available by early 2007.