Reuters in a tweet have just confirmed that the iPhone 5 will start production in July and ship in September according to their sources. Originally rumors had stated that the iPhone 5 had already started production back in March. The new iPhone is slated to have an aluminum body similar to that of current Macbook Pro models, feature a larger 4-inch screen, and a faster processor. The iPhone 5 was also rumored to be delayed because of the Tsunami in Japan which affected the Sony plant rumored to supply the new camera sensor which would bring 8 megapixel photos to the iPhone 5.
If Reuters sources are correct we will indeed see the phone this year.