Apple will issue a new iPhone version later this year and based on reports that emerged, the hit gadget will come with a bigger screen, ditching the standard screen size that the smartphone has been carrying since its 2007 market debut.

Citing an unnamed source it described as knowledgeable to Apple's supply chain, Reuters reported on Thursday that the American firm has struck deals with Japanese and South Korean firms that would manufacture the new iPhone's 4-inch screen.

The report identified the likely screen supplier as LG Display, Sharp and Japan Display - all of which have been asked by the tech giant to start production of the iPhone component by the start of the second half this year.

The reported schedule, tech watchers said, is in line with Apple's usual target of launching the million-selling smartphone by the start of the year's last quarter, which means production lines for the new iPhone in Foxconn will start humming a few months before October.

The news came out a few weeks after the release of Samsung's Galaxy SIII, which wowed the tech world with its dazzling 4.8-inch screen display, easily thumping out iPhone's 3.5-inch screen.

Analysts believe that Samsung's latest smartphone will again power up the South Korean firm's second quarter run following its record-breaking sales in the first three months of 2012, which all but solidified its hold as the top mobile phone maker in the world.

Samsung has reported that it sold roughly 45 million smartphones in the first quarter, which created a considerable wide margin between the company's product lines and that of Apple's, whose iPhone 4S were snapped up by some 35 million consumers worldwide during the same period.

But Apple, presently regarded as the world's biggest company in terms of market capitalisation, is expected by market experts to give Samsung a fierce fight for much of the year despite the likelihood that the Galaxy SIII will enjoy an almost two-quarter lead from the new iPhone, if indeed it would hit the market by October at the latest.

The sales tussle between the two titans could be a repeat of what had transpired in 2011, in which Samsung got the better of Apple in the third quarter, only to cede its position by the end of December 2011 as the iPhone 4S successfully lured hordes of sales in the immediate aftermath of the death of its founder - Steve Jobs.

Apart from pushing up its screen size, the new iPhone, media reports said, could possibly carry the same retina display that the third iPad edition was fitted with, giving the device a head-to-head screen capability with the Galaxy SIII, which like its predecessor was equipped with the stunning AMOLED image-rendition technology that makes picture viewing - still and moving - on the device a delight for users.

If only to safeguard its dominance in the overall sales department, it is likely too that Apple engineers have rolled out a complete overhaul of the iPhone design, experts said, the latest of which came as a letdown as the iPhone 4S mostly retained the physical features of the model it replaced.

Physical tweaks, according to Sterne Agee analyst Shaw Wu could prove crucial for a new tech product to keep the cash register ringing almost continuously.

"Not only do users pay for features, but they also pay for aesthetics and design. That's as important, or more important, than features," Mr Wu told Reuters.