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Thursday, December 14, 2006, 06:00 am PT (09:00 am ET)

iPhone to sport metal casing and virtual click-wheel?

Morgan Stanley analyst Rebecca Runkle in a research note released Wednesday said she is high in her convictions that Apple will launch an iPhone device in the first half of 2007 and offered some specific findings from unnamed sources.

"While we view the supplier list, build forecast and exact launch timing as dynamic over the next month, our recent supply chain conversations give us high conviction in a [first half 2007] iPhone launch," she wrote. "We expect Steve Jobs to announce the iPhone at Macworld or in a separate event early next year.

To date, the analyst says her sources have turned up two flash memory-based models: a $599 4-gig and $649 8-gig. "We assume a slightly lower list price to be conservative," she said.

According to Runkle, the design of iPhone will be slightly larger than the "full screen LCD; 3.5 inch (28x21)" and approximately 4/10ths of an inch thick. It will include a virtual click-wheel/soft-touch design and be a bit wider than the iPod nano but also thinner than a video iPod.

From her checks, the analyst believes the iPhone will sport a metal casing design similar to the iPod nano and be available in "multiple colors including black, white, silver and possibly others."

In terms of functionality, Runkle expects camera, digital audio playback and video. Also likely, but not confirmed, are email and calendar functionality, she said.

Similarly, the analyst is a bit uncertain about which wireless carrier will support the device, but said Cingular is "likely" in the US market.