According to sources speaking to 9to5Mac.com , Apple  is indeed deeply involved in the testing process of a next-gen iPhone with a larger screen . Multiple devices are under test, and "at least one" of them sports a screen that's said to be 3.9 inches across its diagonal with 1136 by 640-pixels resolution. That's a big change from the iPhone's long-maintained 3.5-inch screen size, and 960 by 640 resolution. The information suggests that Apple is going to maintain, pretty closely, the high "retina" density of its display and still increase its size. It also implies a screen ratio change, more closely approaching TV-widescreen shape versus the traditional 4:3 aspect Apple's kept for the iPhone, iPod Touch and iPad until now.
It's also thought that Apple is testing variations of its upcoming iOS6 software for the device that makes the most of the increased screen real estate by adding another row of homescreen icons and also enabling more content to be seen in apps UI's.
Yesterday GigaOM  spoke to several iOS developers and found that on the whole the notion of a larger iPhone screen wasn't a problem for them. There was also a high degree of confidence that Apple would assist in any screen size change by providing migration tools--to avoid an Android-like screen fragmentation issue.
With the rumor that the screen will be the same width, there's likely to be even less of an issue: Existing apps will run as they stand, with just 88 unused pixels at the top and bottom of the new screen--not something even iPhone users will particularly care about because that amounts to fractions of an inch.
Meanwhile 9to5Mac's contact, who seems familiar with the actual hardware under test internally at Apple, notes the phone also sports a smaller docking port.
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