Rumours have been circulating about the next-generation iPhone, with many expecting an iPhone 5 and others speculating a more subtle change to the device naming it the iPhone 4S.

But Deutsche Bank's Chris Whitmore has told clients to expect both an iPhone 5 and an iPhone 4S. In a note issued this morning, Whitmore wrote: "With Nokia and RIMM struggling, the time is right for Apple to aggressively penetrate the mid range smart-phone market to dramatically expand its total addressable market and market share," reports Fortune

Whitmore estimates that there are 1.5 billion potential customers in 98 for the iPhone 4S, which would come unlocked (not connected to a network) and have a pre-paid voice plan. The iPhone 5 would be a full-featured newly designed device with many improvements that is predicted to appear in September.

Whitmore's predictions follow Morgan Stanley analyst Katy Huberty's note yesterday, which claims that the iPhone 5 production will begin in August.