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iPhone 5 rumour: budget handset to launch

Apple's iPhone 5 is expected to launch tomorrow at a special briefing at the company's Cupertino headquarters on Tuesday - but if rumours are correct, the event could be a double announcement, with the IT giant outing its first ever budget smartphone handset.

Photos have emerged on the web over recent weeks showing an iPhone 4 chassis containing some upgraded parts - chief among them a dual-core Cortex A5 processor, similar to the one expected in the iPhone 5 - leading to speculation that a second handset, the iPhone 4S, could be announced tomorrow.

Rumours have circulated previously about Apple producing a cut-price version of its iconic iPhone - frequently denied by the company itself, which has been careful to maintain its image as a premium brand - but never before has the rumour mill had quite so much impetus.

Perhaps the penny has dropped, and Apple is facing up to the fact that offering a lower-end handset may be the only way to counter the onslaught of increasingly stylish, sophisticated - and, in many cases, significantly cheaper - handsets based on Google Android OS. IT news site The Next Web also suggests that a budget iPhone 4S may be Apple's attempt to gain a foothold in difficult Asian markets.

With Apple's announcement due tomorrow, we won't have long to wait to see if this rumour pans out.