I try to stay away from the iPhone rumours, because they just seem to come and go like the winds. This recent one looks reasonably juicy though. Foxconn sure have the scale to make this happen, and the list of component providers looks kosher.
Strangely enough, I actually had the pleasure of dealing direct with Foxconn when I was needing a part for a cheap, broken HP iPaq that I picked up ages ago. They were very receptive to the single retail customer, despite also being the huge behemoth of mass-market manufacturing.