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Hannes Schwaderer, managing director for Intel Germany, said that the new smartphone would also be larger than the current models, to accommodate a bigger display.

Schwaderer said that the Atom-powered model will be one of two that Apple will unveil at its Worldwide Developers Conference in June. The second will be similar to the current handset, but with 3G, he said.

Atom is a new low-power chip designed specifically for mobile devices. The iPhone currently uses chips based on the ARM architecture.

There was some speculation that Apple may be designing its own processor for the iPhone, after it bought PA Semiconductor last month. Apple said that it had no plans to become a chip maker - it was only interested in PA Semi's technology and engineers - though that doesn't preclude it from becoming a chip designer. After all, that it all that the purchased company was.