The phones would have a plastic casing and come in two different sizes of 4.7 and 5.7 inches.

Inside sources told Reuters that testing could begin as early as next month, with a release planned for Autumn.

The phones would come in a choice of six different colours, which would differentiate themselves from the flagship iPhone model.

The move is seen as necessary if Apple are to regain sales from market leader Samsung by breaking into Chinese and Indian markets.

The larger 5.7 screen size, even bigger than the iPhone 5, shows a step towards “phablets” - phones like the Samsung Galaxy S4 or HTC One which are large but not large enough to be a tablet computer - which are becoming increasingly common in the market.

Apple’s profits have fallen over the years amid increasing competition, with some claiming that they are suffering a lack of new, innovative products.

Earlier this week they showcased several products, including their latest mobile operating system iOS7.