Asian suppliers to Apple have reportedly begun manufacturing a lower-priced version of  the iPhone 4 with a smaller 8 gigabyte flash drive.

The flash drive for the 8GB iPhone 4 is being manufactured by a “Korean company”, that could mean South Korea's Samsung which is Apple's supplier when it is not being sued. The iPhone 4 was first launched in June 2010 with 16 GB and 32 GB versions, with a white version added to the lineup in April. The 8GB version is expected to launch within weeks.

Apple appears to be wanting to push into the emerging market segment where customers want to switch to low- to mid-end smartphones from high-end feature phones, which usually cost $150-200. Even with an 8 GB hard drive Apple would be hard pressed to get the phone below $200 without losing some other functions.

The new iPhone, which some call the iPhone 4S because of its largely identical appearance to the existing iPhone 4, will have a bigger touch screen, better antenna and an 8-megapixel camera.

More here.