As the October release date nears for the iPhone 5, the rumor mills are churning anew over its expected features and specifications.

Apple needs to be much more cautious over the specifications of the iPhone 5 as several Android smartphones are threatening the next iteration with breathtaking features. The notable ones include Samsung Galaxy S2 and Motorola Droid Bionic. Both smartphones feature the latest version of Android Gingerbread OS with screen size of at least 4 inches.

In addition, the recent breed of Android phones such as HTC Holiday, HTC Thunderbolt and Motorola Photon found expression in 4.3-inch displays. The trend seems to highlight that the next barrage of Android phones will follow the 4.5-inch form factor.

As a result, if Apple seeks to pose a strong competition against Android it may have to increase its screen size especially when it is prepping for a bigger iPhone market in the second half of this year.

Apple is also rumored to be boosting the screen size of the iPhone 5 to compete with Android rivals, probably going for a 3.7 to 4-inch screen. But if the latest findings from a Wall Street analyst are to be believed, then Apple would not increase the screen-size of iPhone 5.

iPhone 5 component orders increased for FQ4 (Sept.) and FQ1 (Dec.); timing of orders continues to suggest an October launch. FQ4 orders for iPhone 5 increased ~700k; timing continues to suggest an Oct. launch. iPhone 5 screen size likely to be same as iPhone 4, Pacific Crest Securities analyst Andy Hargreaves wrote in a note to clients.

iPhone 4 has a 3.5-inch screen featuring the LED backlit liquid crystal display with a 960×640 pixel resolution and is marketed as the Retina Display.