The report comes from DigiTimes, which has an uneven track record on Apple in general, but a slightly better batting average when discussing the details of manufacturing contracts.
In February, DigiTimes announced Pegatron had won the contract for building the expected next generation UMTS iPhone 4. Previous iPhones have been built by Foxconn, which also builds Apple's Mac mini, iPods and the iPad, and is the company's main supplier.
Rumors surrounding the possibly of a CDMA iPhone model that Apple could sell through Verizon and Sprint have regularly surfaced throughout the iPhone's entire history, and have recently blossomed as speculation about the end of AT&T's exclusive contract in the US has reached a fevered pitch.
At the same time, DigiTimes has also reported rumors of an upcoming new iPad with an OLED display, which are almost certainly wrong. The paper also incorrectly announced in late 2006 that Apple was working with AMD to deliver notebooks using its CPUs, and then reported last year that Apple was building a netbook for delivery in 2009.
Pegatron is a three year old Taiwanese company formed during a restructuring of Asustek, which resulted in a split between Asustek's own Asus-branded products, its PC-related manufacturing performed under the Unihan name, and contract manufacturing under the Pegatron name.