Jobs tipped to announce new iPhone at WWDC

Apple chief executive Steve Jobs is preparing a triumphant return from his six-month leave of absence, according to reports, and the company is readying a cheaper version of the iPhone.

Apple's Worldwide Developers Conference starts next week, and rumours suggest that Jobs will return to the company in good health on 8 June, kicking off his responsibilities with a keynote announcing a new iPhone model.

Apple declined to comment on the reports or confirm a specific date for Jobs' return. A spokeswoman for the firm said: "There is no comment on this beyond what [Apple spokesman] Steve Dowling said in the WSJ article: 'We look forward to Steve returning to Apple at the end of June'."

The Financial Times cited a source as saying that Apple will release a 4GB iPhone costing $50 to $100 (£31 to £62) less than current versions. A June release makes sense, as many users will be nearing the end of their existing contracts two years on from the original release date of June 2007.

A new version of the iPhone operating system is also expected to be released next week.

The iPhone 3.0 update will add multimedia messaging suppport and the ability to cut and paste text, the lack of which has been a common gripe with iPhone owners. IPhone users will be able to download the latest version for free, while iPod touch customers will have to lay out $9.95 for the software update.