9to5mac is reporting that Apple is testing multiple next generation iPhone prototypes and at least one of those prototypes feature a bigger 3.95-inch screen. Chuck Remington wrote on 9to5mac:

Right now we know of a few next-generation iPhone candidates in testing. These prototype phones are floating around Apple HQ in thick, locked shells in order to disguise the exterior design to “undisclosed” employees. We know of two next-generation iPhones in testing with a larger display: the iPhone 5,1 and iPhone 5,2. These phones are in the PreEVT stage of development and are codenamed N41AP (5,1) and N42AP (5,2). Because Apple reserves certain models for internal-only usage (such as the N96 phone we previously reported on), we’re not sure which of the two devices will make its way into the world later this year.

Both of these phones sport a new, larger display that is 3.95 inches diagonally. Apple will not just increase the size of the display and leave the current resolution, but will actually be adding pixels to the display. The new iPhone display resolution will be 640 x 1136. That’s an extra 176 pixels longer of a display. The screen will be the same 1.94 inches wide, but will grow to 3.45 inches tall. This new resolution is very close to a 16:9 screen ratio, so this means that 16:9 videos can play full screen at their native aspect ratio.

Even though 9to5mac has been right about Apple rumors sometimes, we have our doubts about this 1136 x 640 resolution. If Apple is changing the resolution why not just go with 1280 x 720 on a 4-inch screen, rather than go with some odd resolution that's between 16:10 and 16:9.