A new day begins and a new dose of iPhone 5 rumors circles around the internet. Now, the latest from the rumor mill is that iPhone 5 would come up with a 4-inch screen to take on Android smartphones.

According to the new case designs released by technology website MacRumors, the much-anticipated iPhone 5 is expected to have a bigger screen-size compared to iPhone 4's 3.5-inch display.

The report said the iPhone 5 design may have dimensions of 4.33 x 2.36, suggesting a shorter but only slightly wider design. In comparison, the iPhone 4 dimensions are 4.5 x 2.31.

The potential move by Apple to boost its screen-size comes at a time when Android manufacturers such as Samsung, HTC and Motorola are releasing thinner smartphones with bigger screens.

Several Android smartphones that are expected to release in the fall, along with iPhone 5, would sport a minimum of 4-inch display.

Samsung Galaxy S2, which is touted as iPhone killer, has a 4-inch screen and would release in the U.S. in mid-September. AT&T's version of the smartphone would have a 4.3-inch screen, while the Sprint and T-Mobile versions sport a 4.5-inch display.

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 needs to pose a strong competition against Android it may have to increase its screen size especially when the California-based technology giant is prepping for a bigger iPhone market in this second half of the year.

However, Apple certainly knows how to surprise and already has a few things in place like iOS 5 and iCloud which can steal the thunder from Android devices. There are also chances that Apple may keep its screen size under 4 inches as most tech observers believe that customers consider smartphones with 4-inch screen as too big and cumbersome.

Recently a DigiTimes report said despite rumors of a bigger screen size, Apple could either stick with its 3.5 display or maybe slightly upgrade it to 3.7 inches. The site said that, according to its sources, Apple could adopt a design that will lead to a thinner bezel for the display panel, making the screen appear to be larger.