Sales of the iPhone, first introduced in 2007 with the touch screen template now adopted by its rivals, account for around half Apple's total sales.

Apple has decided on the bigger 4.6-inch display for its next iPhone and started placing orders to its suppliers, the Maeil Business Newspaper said, quoting an unnamed industry source.

Its major display suppliers LG Display and Samsung Electronics Co declined to comment.

Samsung, which is also the biggest challenger to Apple in smartphones, uses 4.6-inch OLED display for its flagship Galaxy S II smartphone, introduced in April last year.

The high-definition "retina" display--containing several times as many pixels within the same area-- is used in the latest iPad released earlier this month.

The latest iPhone 4S was introduced in October last year.

(Reporting by Miyoung Kim; Editing by Michael Perry)

• A Permanent Economic Emergency