Is Apple’s iPhone coming even closer to release? The latest rumour floating around the Internet is that Hon Hai Precision, a manufacturing company based in Taiwan, has won a contract to manufacture 12 million mobile phone handsets for Apple.

The Commercial Times, which is the source of the report, said that the phones will launch during the first half of the year. Hon Hai Precision is apparently the same company as Foxconn, whose factories were the subject of intense scrutiny during the summer.

The Commercial Times’ report has been picked up by Bloomberg and Forbes, suggesting that it’s a legitimate story, and not just the figment of a Mac fan’s imagination.

Apple patents are dug up on a regular basis, and one filed earlier this year by the company was for the phrase “Mobile Me”.

Analysts are speculating that Steve Jobs may whip out the iPhone at MacWorld expo in January, although that may be a bit soon.

In related Apple news, KLM and Air France both told Reuters that Apple had jumped the gun in announcing iPod integration in their planes. Apple made the announcement on Tuesday, when Microsoft launched its Zune.

Air France said that it’s too early to confirm the details, while a KLM rep said, “It’s very premature what Apple are [sic] saying”. He continued: “We have no idea if this is technically feasible, if its financially viable, or if customers want it".

“At this moment, we have absolutely no intention of introducing it on board.”