Yesterday, an intriguing theory on how Apple could build an iPhone with a 4-inch screen made its way around the tech world. The idea is based on the fact that Apple could make the display larger, without drastically increasing the size of the handset.

Judging from the feedback I’ve gathered from our readers, on Twitter, and on other websites, the consensus seems to be that this theory is way off base; Apple would never do anything like it. But to me, it feels like everyone is overlooking a few things…

Let’s start this off by clarifying what we’re talking about here. For those that missed it yesterday, the aforementioned theory says that Apple could enlarge the iPhone’s screen by making it slightly longer on the top and bottom. The display would have a 9:5 aspect ratio and a resolution of 1152 x 640.

Ok, now that we’re all on the same page, let’s address the first problem with this scenario: 3rd party apps. What would happen to all of the 500,000+ iOS apps if they weren’t immediately updated? How would they look on the new screen? While I don’t have a direct answer for this, I can say that this wouldn’t be the first time that developers had to alter their apps for new devices. The iPhone 4, the original iPad and third-gen iPad all come to mind. And there hasn’t been a problem yet.

Another issue people seem to have with the theory is that it would make the iPhone unusable with one hand; ie: you wouldn’t be able to hold the handset in one hand and touch the opposite corner of the screen with your thumb like you can with the current iPhone. But what I think most folks are missing here is that the concept in question involves making the iPhone just a few centimeters taller. A majority of the proposed screen’s added real estate would come courtesy of smaller bezels and possibly a modified home button. So we’re not talking about much of a difference in the actual size of the device.

What I also find interesting about this concept, which I haven’t seen mentioned anywhere else, is that it lines up perfectly with iLounge’s report from last November:

“Our most reliable source has spoken: expect body changes for the next iPad, iPhone, and MacBook Pro. Here’s what we’ve heard. The third-generation iPad will become modestly thicker (0.7mm) in order to accommodate the twin light bar system needed for its higher-resolution display…

….Our source says that the next-generation iPhone will not look like the teardrop-shaped version that was widely rumored for release in 2011. We’ve been told that the device will have a 4-inch display and will be 8mm longer than before, with a metal casing (probably aluminum).”

Considering that this report nailed the details of the third-generation iPad — 5 months before Apple unveiled it, it wouldn’t be crazy to think that it was spot on regarding the next-generation iPhone as well.

And finally, read what John Gruber wrote yesterday in a linked-post to the theory on Daring Fireball: “Methinks “Colin” [the original source behind yesterday’s story] wasn’t merely guessing or idly speculating.” I know, I know, this doesn’t prove anything. And if it was said by any other pundit, I would’ve dismissed it. But given the fact that Gruber has a history of being an “industry insider” when it comes to Apple, the comment does add some spice to the story.

After more than two years with the same design, the iPhone is certainly due for a makeover. And to be honest, I wouldn’t be the least bit surprised if the next one looked something like the above photo — which to me illustrates the 4-inch iPhone theory quite nicely.

What do you think?