iPhone With 4-inch Screen Is In Testing
The conversations as the next-gen iPhone will sport larger screen get some non-official confirmation. According 9to5mac two iPhones are in testing. They are codenamed N41AP (or 5,1) and N42AP (5,2), though they are enclosed not to allow info leak.
However, the source is sure these new iPhones sport 3.95-inch displays with a resolution of 640×1136 pixels, which means their pixel density is 330ppi. Asa refresher the iPhone 4 and 4S sport displays with 329ppi pixel density, thus if this turns into reality the sixth generation iPhone will sport Retina Display. But this doesn’t mean the phone’s dimensions are changed too– the screen will still measure 4.93 cm in width, but at 8.76 cm it will be notably taller than current iPhones.
Moreover, these displays will sport an aspect ratio of 16:9 instead of current 3:2. Thus the upcoming iPhone must run iOS 6 to be optimized to fit more content on the bigger screen.

At the end, the other info says the next-gen iPhone will still sport a home button, though it will be reduced in size, and utilize a smaller dock connector. Well, we only have to wait and see what Apple has thought for us.