We had heard a new iPhone would be going into production within the month and 9to5mac has heard that multiple new iPhones are in testing. Two prototype are said to be making their way around Apple headquarters, known as NAAP iPhone 5,1 and N42AP iPhone 5,2. The physical appearance is hidden thanks to a disguised shell or casing.
About the display
There has been plenty of conjecture as to how Apple will handle the change in resolution and how that will impact developers. This report indicates the new iPhone will come in at 3.95-inches diagonally, a modest bump from the current 3.5-inch design, with a resolution of 640 x 1136. The oft-rumored new dock connector is said to be narrow version of the current connector, but around the size of a micro-USB connector.
If true, the new iPhone will be taller, but retain the same width of 1.94 inches wide. A forum poster at the Verge had suggested this as option for Apple. By changing the aspect ratio from 3:2 to 9:5, you can retain the minimum requirement of PPI (pixels per inch) to be classified as a retina display.
This corroborates with a story from iMore, suggesting Apple has yet to decide on the final new iPhone. These reports are in contrast to recent reports from Bloomberg and Reuters, which suggest Apple has started sourcing displays to begin production within the month.