The iPhone 5 will be a similar size to the iPhone 4 but will have a larger, 4in screen that will utilise more of the surface area of the front of the device than its predecessor, it has been reported.
The China Times claims that trial production of the iPhone 5 has already begun and the device will launch at some time in the third quarter of 2011.
It is widely believed that the iPhone 5 will be announced at the Worldwide Developer Conference (WWDC) in San Francisco in early June.
There have been conflicting reports about whether or not the iPhone 5 will feature NFC (Near Field Communication) technology, which could enable 'contactless' payment systems that would provide an alternative to credit cards or physical tickets for travelling.
Last week, what are claimed to be mock-ups of cases for the iPhone 5 made it into the public domain, seeming to show that the location of the iPhone 5's controls would be in the same place as in the previous generation.
There is also a degree of debate about whether the iPhone 5 will revert to an aluminium back, as with the original iPhone, or whether Apple will continue with the glass front and back linked by a steel frame as first seen in the iPhone 4.
The China Times report suggests that Apple will opt for the aluminium, backing previous reports that the company was struggling to find a way to deal with scratching and paint mixture issues that the glass back causes.
This story, "Report: iPhone 5 'Will Have 4-inch Display, Launch in Q3'" was originally published by Macworld U.K..