Japanese blog Mac Otakara today offers a brief report claiming that Apple is working on a new product for release in 2013 that will carry a 5-inch Retina-quality display.
The product which has 5-inch Retina Display is expected to be released in 2013, and resolution of this LCD will be 1,600 x 960 pixel (800 x 480 by legacy majour) or 1,280 x 960 pixel (640 x 480).
Apple has been rumored to be developing a so-called "iPad mini" carrying a 7.85-inch display carrying the same 1024x768 non-Retina resolution of the original iPad and iPad 2. Despite the smaller physical size of the iPad mini compared to the iPad, calculations suggest that the screen size would meet Apple's app design guidelines to keep interface elements of existing iPad applications at an acceptable physical size from a usability perspective.
A device carrying a 5-inch display at either 1600x960 or 1280x960 would introduce additional complications for developers, presuming that it would be an iOS device designed to run App Store apps. That resolution would not allow for easy scaling of existing iPhone/iPod touch or iPad apps to fit the new device's display, requiring developers to target yet another set of screen dimensions with their apps.
Mac Otakara has had a mixed track record in the past, and when combined the apparent difficulties for app developers, we hesitate to put much faith in these claims at this time.