MacRumors & ThinkSecret are reporting that the long-awaited Apple Phone will most likely be released in Early 2007.

Despite many rumors and reports of an “iPhone Release” this year, Apple is said to be facing “significant technological hurdles” in their attempts to create a entirely new type of cell phone.

ThinkSecret says… Apple has scaled back its ambitions and has opted to go with several off-the-shelf parts for what will be the first of at least two or three different phones that sources say Apple hopes to deliver in 2007.

Apple is said to be engineering the Apple Phone to include a 3 Megapixel Camera, 2.2 Inch Display, and iTunes/iPod Integration.

Currently the storage capacity of the phone is unknown, but sources say that the phone will be able to hold significantly more than the 100 song limit in the current Motorola iTunes-Integrated phones.