NEW YORK ( TheStreet) -- For months, rumors have been pointing to at least one and probably two larger Apple ( AAPL) iPhones being developed for release later this year.
Reuters reported Tuesday that Apple suppliers will actually begin manufacturing the bigger screens for the new models as early as next month.
Apple shares were gaining 0.4% to $538.55 in early trading Tuesday.
Quoting unidentified sources, Reuters said Japan Display, Sharp and South Korea's LG Display ( LPL) have all been chosen to produce touch-screen displays for the new model or models. None of the companies would comment on the report.
Apple is currently behind in the smartphone screen-size race. Apple founder Steve Jobs had insisted larger smartphones weren't necessary. Both current iPhones, the 5s and 5c, use 4-inch screens. Compare that to new Google ( GOOG) Android and Microsoft ( MSFT) Windows phones that have touchscreens measuring 4.5-inches and larger. Some popular models made by Samsung, LG, Nokia and others offer 6-inch displays.
Apple has reportedly ordered screen sizes of 4.7-inches and 5.5-inches. Supply sources claimed the smaller display will begin production in the next few weeks while the manufacture of the larger, "phablet"-sized touchscreen could be delayed.
Both future models -- rumored to be called iPhone 6 -- are expected to continue using "in-cell touch panels" (just like the iPhone 5) which allows for thinner displays than other designs using standard touch panel technologies.
But according to a source familiar with the situation, difficulties in producing very large in-cell panels will force a delay in the manufacture of 5.5-inch screens. Reuters said the decision was made to begin making the smaller 4.7-inch displays at this point. Production on the 5.5-inch screen is expected to begin several months later with the possibility of switching to film-sensor technology instead of in-cell panels.
Japan Display will reportedly be the the first supplier to begin production, which is expected to start in early May. The other screen makers are expected to follow a month later.
The new iPhone models are expected to be released for sale later in the year, most likely sometime this fall.
-- Written by Gary Krakow in New York.
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