We’ve heard a lot of buzz about the rumored smaller, cheaper “iPhone Nano”, but a new report from Digitimes, claims that the fifth generation iPhone may be equipped with a 4-inch screen rather than the current 3.5 inches.

The component suppliers noted that the production lines for Apple’s next generation iPhone have begun testing, and Apple is interested in expanding the screen size to 4-inches to support the tablet PC market as the vendor only has a 9.7-inch iPad in the market.

The trend is evident with Android smartphones featuring 4-inch or bigger screens for high-end devices. To keep on par with Android’s 4-to5.5-inch screen market, Apple will probably be joining in with its 4-inch screen phones.

This is rather surprising considering Apple COO Tim Cook  mentioned in a previous conference call: “”Software is the key factor, we believe that we are a few years ahead than the competition. Having different screen sizes, different input methods, different hardware, make things difficult for developers.”

However, with the ever-evolving landscape of smartphones, Apple may have to adjust as well.