The Wall Street Journal today reported that Japanese LCD display giant Sharp Corporation, South Korea's LG Display and Japan Display Inc - a new company established out of three existing display units - are all now mass producing panels for the next iPhone.
Citing unnamed people "familiar with the matter", the paper said that the new iPhone screen will feature in-cell technology, which integrates touch sensors into the LCD, meaning it is not necessary to have a separate touchscreen layer.
Removing the touch layer, which is usually about half a millimetre thick, makes the screen thinner, but also improves the quality of the displayed images, DisplaySearch analyst Hiroshi Hayase told the Journal.
The added advantages for Apple of using in-cell would be cutting costs and simplifying the supply chain, as it would not have to source both touch and LCD panels.
This also comes at a time when Apple is facing a major challenge in the smartphone market from Korean firm Samsung, which has pioneered organic light-emitting displays, including a 4.8-inch OLED screen in the new Galaxy S3 smartphone.
Primary benefit of Samsung's OLED mobile screen technology is that it does not require backlighting, enabling the smartphones to be thinner than those fitted with traditional LCD.
Apple's move to in-cell would enable it to make a much thinner and sleeker iPhone model, but the Journal claims that the display makers are already struggling with the manufacturing process, particularly in regards to the high volumes Apple will require for a global product launch.
The US firm is expected to announce the sixth generation of the iPhone in autumn, possibly in October, as current model the iPhone 4S was announced in the same month last year.
As with previous product launches, Apple would most likely put the handset on sale in key global markets a few weeks after the press announcement.
Reports have suggested that the new iPhone will have a screen larger than the current iPhone's 3.5 inches - and incorporating thinner display technology would certainly help in this regard.
It is also thought that the new Apple handset will feature a smaller connector port than previous models, pack the same A5X dual-core processor as in the new iPad and come with support for 4G connectivity and Near Field Communications.
Meanwhile, Apple yesterday released the third beta version of the iOS 6 mobile operating system, which will launch in the autumn and most likely run on the new iPhone.