We recently reported that Apple has either made an investment or an advance payment to Sharp to spend on its factories that produce IGZO (Indium, Gallium, Zinc) panels for the 3rd generation Apple iPad and the 6th generation Apple iPhone. These displays are thinner and said to provide for improved battery life.
While the 4 inch device expected next year is unnamed, it could be the next generation of the Apple iPhone. When the Apple iPhone 4S was introduced this year, many were surprised that the crew at Cupertino had not increased the size of the display, deciding to keep it at the same 3.5 inches it has been since the original iPhone was launched in 2007. With mid to high-end Android models hitting the market with screens ranging from 4 to 4.7 inches, there is some thought that Apple will give in and increase the iPhone's screen size when it releases what is speculated to be a totally redesigned model next year.
The smaller Apple iPhone screen size was one of the smartphone's specs that Samsung recently made fun of in a commercial poking fun at Apple fans.
source: macotakara.jp via AppleInsider