iPhone 5 rumored to sport 4-inch screen while rumors of an iPhone Nano persist

Even though we're more than 4 months away from a new iPhone, the rumor mill has been working in overdrive as of late. In the last week we've seen rumors suggesting that the iPhone 5 will sport a 4-inch screen while others relay that Apple is also working on an iPhone with a smaller form factor.

Even though we're more than 4 months away from a new iPhone, the rumor mill has been working in overdrive as of late. The iPhone 5 will inevitably launch sometime this June, and while we've heard rumors of NFC functionality and a world-class camera, one particularly intriguing rumor came via Digitimes who reported earlier this week that the iPhone 5 may spot a new form factor that includes a 4-inch screen.

The component suppliers noted that the production lines for Apple’s next generation iPhone have begun testing, and Apple is interesting in expanding the screen size to 4-inches to support the tablet PC market as the vendor only has a 9.7-inch iPad in the market.

While Apple has consistently used a 3.5-inch screen on all previous iPhone models, the plethora of competing devices sporting big screens, particularly from Android, may very well be the impetus for Apple to vary the iPhone form factor in a major way. Though Apple has often, and in my opinion correctly stated that the Android platform is fragmented, there's no denying that choice for consumers is a net positive. Besides, Apple understands that a high-end premium device, though affordable, isn't everyone's cup of tea and that some folks just want a cheap and no-frills kind of device. Just look at Apple's track record with the iPod, for example, and the dizzying number of models and form factors it experimented with and released over the past 7 years.

So is there any merit to an iPhone with a 4-inch screen? It's hard to say given Apple's notoriously secretive ways, not to mention the fact that the company routinely tests devices that never make it to market. But this isn't Apple's first rodeo and given the surging popularity of  Android devices, it stands to reason that Apple may indeed spice things up with the iPhone 5.

Incidentally, and also rumored to be in response to a wave of cheap Android devices flooding the market, Apple is reportedly experimenting with a smaller iPhone form factor that would be available to consumers sans a 2-year contract. Rumors of this supposed iPhone Nano were relayed by both Bloomberg and the Wall Street Journal so it stands to reason there might be some truth to it.

One of the people, who saw a prototype of the phone late last year, said it is intended for sale alongside Apple's existing line. The new device would be about half the size of the iPhone 4, which is the current model.

The new phone—one of its code names is N97—would be available to carriers at about half the price of the main iPhones. That would allow carriers to subsidize most or all of the retail price, putting the iPhone in the same mass-market price range as rival smartphones, the person said.

Will the Summer of 2011 be the year when Apple finally diversifies its iPhone lineup? It very well may be.

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Copyright © 2011 IDG Communications, Inc.