Apple Computer (AAPL) is now working on developing a second iPhone that will likely have instant messaging capabilities and will work with its iTunes software, according to one Wall Street analyst.

Shaw Wu, an analyst with American Technology Research, wrote in a Nov. 20 research paper that this iPhone will leverage the iChat feature on the company's Macintosh computers to offer users IM capabilities.

"Time to market is not certain to us as it appears to be in the development phase," Wu wrote in his Nov. 20 research paper. "We believe this product is [Apple's] 'smart phone' and could be branded as 'iChat mobile.'"

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There has been much speculation as to when the Cupertino, Calif., company will offer its own cell phone line that will work with its popular iTunes music software.

In September, Gene Munster, a senior analyst with Piper Jaffray, wrote that Apple would debut an iPhone within "four to six months."

In his report, ATR's Wu also wrote that Apple will unveil the first of the two iPhones sometime in early 2007.

Speculations about when and where Apple would debut its cell phone has increased in recent weeks, following an article in the Commercial Times, a Chinese-language newspaper, that reported that Foxconn Electronics had been given a contract for 12 million cell phone units.

The paper cited unnamed "Taiwan-based" sources and the article was quickly picked up by dedicated Apple blogs and Web sites.

The company has not commented on the overseas news reports and an Apple spokesperson could not be immediately reached for comment about the latest reports.

In his research paper, Wu wrote that the first of the two iPhones will look something like the company's iPod Nano music player.

On Oct. 18, Apple announced its quarterly results. While there was no mention of an iPhone, company officials said they were upbeat about what the company would begin to offer customers in 2007.

In addition to cell phones, Wu wrote that Apple will benefit from the new Mac OS X, which is called Leopard, and its iTV feature, announced on Sept.12, as well as new features the company will add to its iPod line.

He said early estimates show that Apple will sell about 14 million iPods in the fourth quarter of 2006.

Wu added that many of these new products will likely debut at the MacWorld Expo in San Francisco, which takes place in January.

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