Former Engadget editor, Joshua Topolsky let loose the dogs on a potential new shift for the iPhone 5 over at ThisIsMyNext. Citing close internal Apple sources, Topolsky says the iPhone 5 will have  3.7-inch screen that reaches edge-to-edge (we’ve hear 4 rumors of a 4-inch screen before), a multitouch gesture-based Home button and a chassis that resembles a teardrop. The body is supposedly tapered – similar to the MacBook Air.

Here’s a mock-up by @CDugD (it’s a mock-up based on rumor, so don’t take it as fact). Topolsky’s report says the iPhone 5 will be thinner than the iPhone 4 (an already anorexic phone). The screen is said to be bonded glass, which would make the LCD thinner.

Worried about the Retina Display? His report says the increase in screen size will lead to a drop in pixel density from 326 to 312 pixels per inch, but would still qualify as “Retina Display” (anything over 300 PPI is indiscernable to the naked eye). A 4-inch screen would drop the PPi down to 288, disqualifying it from being RD (we’ve heard the Meizu MX has a 4-inch 960×640 display, but not sure what the PPI on that will be).

As always, please remember this is pure speculation. Sources might have credibility, but whatever Topolsky’s Apple insider might have seen, it could have just been a prototype made to throw people off or created as an experiment for using new materials and forms. Jony Ives loves him some raw materials!

While it’s pretty clear a new iPhone 5 or iPhone 4S won’t be launching until this fall, it’s still fun and exciting to hear what the Cupertino heads are working on. I’m all for thinner (can’t get enough of it), but there’s a certain limit that even Apple will eventually hit in terms of making the iPhone thinner: acceptable radiation levels, juggling long battery life and keeping the device from heating up.

We’ll see in a few months whether or not the iPhone 5 will be completely redesigned or just a spec bump along the lines of the iPhone 3G to 3GS. My bet is Apple will keep the same design as the iPhone 4 and update its A4 to A5 CPU and maybe toss in a better camera that shoots 1080p – maybe.

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