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Reuters issued the report on Wednesday, citing South Korea's Maeil Business Newspaper. An unnamed industry source reportedly told the Korean publication that Apple has chosen the larger display and has already begun ordering the part from suppliers.
The rumor suggested that domestic Korean suppliers have received the orders, making Samsung and LG likely candidates as suppliers. Both companies have supplied displays for Apple's mobile products in the past.
The original report also claimed that the new display would be a Retina Display, which Apple specifies as having a pixel density of 300 pixels per inch when used at a distance of 10-12 inches.
If accurate, Wednesday's report signals a break by Apple from its past practice, as the company has elected not to change the 3.5-inch screen size of the iPhone since it launched in 2007. However, the likelihood that the rumor is indeed accurate appears to be relatively low. Rumors of a 4-inch iPhone screen have persisted for some time now, but claims of a 4.6-inch screen size are some of the largest yet.
Samsung's Galaxy Nexus smartphone has a 4.65-inch screen
In addition, the rumored second quarter launch is highly questionable, as it would mean a new iPhone arriving between six to nine months after the iPhone 4S. A machine translation of the original report has the article claiming the new handset will come out "this summer" with no mention of the second quarter. The astronomical definition of summer most closely aligns with the third quarter of the calendar year. Multiple reports have pointed to a September or October launch for the next-generation iPhone.
A number of Wall Street analysts expect the sixth-generation iPhone to incorporate 4G LTE. Investment firm Barclays said on Wednesday that Apple is reviewing components for the next iPhone and is likely to utilize the Qualcomm "MDM9615" chip that supports voice and data connections over LTE. Speculation has also arisen that Apple will revert to a simpler naming scheme for the iPhone as it has recently done with the iPad.