Apple iPhone Prototype Draws Gawkers

Found phone fuels mystery around Apple's next iPhone design.
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NEW YORK, (

TheStreet

) --

Apple

(AAPL) - Get Report

looks to be ditching the curved-back chrome framed iPhone design in favor of a flatter more industrial look.

An apparent prototype of the Apple iPhone found its way into the

hands of the gadget guys

at

Gizmodo

. The camouflaged mystery phone X was presumably lost at a Silicon Valley night spot recently and recovered by tech sleuths.

The phone, if it is in fact a real Apple design, could be a refreshed version of the

three-year-old iPhone

that is due for an upgrade this summer.

According to Gizmodo, the phone features a user-facing camera for video calls, a slightly smaller screen, a larger battery and a refined plastic back that could help with antenna reception.

For investors, the reports of the new phone could spell big sales for the iPhone later this year, but it may cause sales of the current iPhone 3GS to suffer as would-be buyers hold out for the latest and greatest.

The news comes as gadget fans salivate over the

Verizon Droid Incredible

due to arrive at the end of this month.

The prospects of suddenly stalled sales of the old iPhone knocked Apple shares down 2% Monday.

Written by Scott Moritz in New York.