iPhone trying to keep up with Jones: grasping for 4″ screen?

It seems like just yesterday we heard the rumor Apple was looking at releasing a smaller, cheaper iPhone version for the masses. Today, DigiTimes is reporting Apple will launch a 4″ screen iPhone come June. A 4″ screen would match the big Android phones of the day such as the Droid and Evo (with it’s even bigger 4.3″ screen).

The component suppliers noted that the production lines for Apple’s next generation iPhone have begun testing, and Apple is interesting in expanding the screen size to 4-inches to support the tablet PC market as the vendor only has a 9.7-inch iPad in the market.

Could it be that Apple is considering offering variants of their iPhone design, something they’ve stayed away from thus far? DigiTimes often throws out these claims and I am not confident in their track record; translation: I am pretty suspicious of this one. Smaller, cheaper devices make for more sales while a larger screen cuts into what? A niche of a niche?

Read: [DigiTimes]