MacRumors.com

SinoCast Daily Business Beat reports that Foxconn, Apple's Taiwanese manufacturing partner for the iPhone, has begun production of a China-specific iPhone lacking Wi-Fi connectivity.

Two production lines in the Foxconn Shenzhen plant are producing 90-coded mobile phones, device that looks like iPhone 3G and iPhone 3GS, said one source.

The mysterious products might be the very model designed for Chinese users, according to another source, noting that the massively-produced device has no Wi-Fi functions, just like the A1324 model, the Chinese version of 3G iPhone being sent to the China Telecommunication Technology Labs (CTTL) for a test.

The news comes on the heels of a report from research firm Wedge Partners claiming that Apple has officially applied to the Chinese government for a Network Access License to began selling the Wi-Fi-less iPhone there by January 2010. The Chinese government has adamantly objected to Apple's desire to include Wi-Fi on iPhones sold there, desiring to route all Internet traffic through state-controlled cellular networks.

The Chinese version of the iPhone reportedly will run using the same GSM network standard as existing models, preventing it from being deployed on several of China's largest carriers, such as China Telecom, that utilize the CDMA standard. Consequently, Apple appears to be moving toward a deal with GSM carrier China Unicom for the iPhone. Apple had reportedly initially targeted China Mobile, China's largest carrier, for the iPhone, but extended negotiations between the two companies broke down in the wake of disagreements over revenue sharing, subsidies, and App Store control.

Apple Chief Operating Officer Tim Cook noted during the company's April earnings conference call that the company hoped to have the iPhone released in China within a year, and Apple seems to be rapidly progressing toward meeting that goal.