Reuters reports that Apple is planning a cheaper iPhone, which would be ideal for emerging markets. (Chris Goodney/BLOOMBERG)

A report from Reuters indicates that Apple is planning to roll out a cheaper 8GB iPhone 4 when it launches the iPhone 5 in the coming months.

Citing “two people with knowledge of the matter” the report says that manufacturing has already begun on the cheaper phone, which reportedly is being made by a Korean company.

Apple COO Tim Cook has previously hinted that the company is looking at making a lower-end iPhone.

In its last record-breaking quarter, Apple sold 20.3 million iPhones, despite the fact that many were expecting users to wait for the next model to launch this fall.

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