Apple's upcoming iPhone 5 will supposedly feature a 4-inch screen.

The next generation of iPhone will use a 4-inch screen, according to Reuters' sources who are 'familiar with the situation'. Apple has reportedly started placing orders for the bigger display with suppliers in South Korea and Japan.

A larger screen would replace the repeatedly used 3.5-inch display and the suggestion contradicts the news that the 5 in iPhone 5 stands for 5-inch screen.

The report said that production of the display could start next month with LG, Sharp and Japan Display. The iPhone 5 would then begin assembly as early as August. As far as we know, the iPhone 5 will "launch" in September.

It is widely thought that the move to a bigger screen is part of a response to competition from the likes of Samsung and HTC. The former has unveiled the Galaxy S3 which has a 4.8-inch screen and HTC's One X sports a 4.7-inch one.

The iPhone 5 rumour mill is picking up pace so check out our iPhone 5 release date, specs and rumour round-up for all the latest chatter.