According to MyDrivers, a Chinese news blog, the next generation iPhone will debut in August and will feature in-cell touch technology for the display. Their source? MyDrivers claims that their source is Apple’s industrial chain.

The benefit of having an in-cell touch panel is that it would allow Apple to make their phones thinner. Instead of having separate layers for the display and touch panel, the touch panel itself would be incorporated into the display. We’ve seen Apple’s willingness to tinker with their panel design on the MacBook Pro with Retina display, which did away with a protective layer of glass to shave bulk off the machine’s display.

iPhone 5 Larger Display

Photograph accompanying MyDrivers’ article

Damaging the credibility of the piece, the article is accompanied by a picture of a display, with a caption that Chrome’s translate feature reads as “Before exposure of the so-called new iPhone front panel.” This panel is clearly of the same aspect ratio of the iPhone 4S, and in fact looks to be identical.

iPhone In-Panel Touch

iPhone 4 OEM panel from Amazon

MyDrivers’ source also repeats the rumor that the new iPhone will have a larger display. According to the machine translation of the page “the viewing area will be expanded by about 30%.” Which is odd, because the article also acknowledges rumors that the screen is moving from a 3.5 inch form factor to 4 inches diagonal. The rumors of the taller 4 inch iPhone display would account for around a 15% increase in screen size. Is this is math failure, or is this measure also taking into account a shrunken bezel?

The site also gathers from rumors that the device will be thinner and feature a 4-inch touch screen, a 32nm dual-core processor, 1GB of RAM, NFC (presumably for Passbook), and iOS 6.

What do you think? Will the next generation iPhone launch in August with an in-panel touch sensor? Share your thoughts in the comments section below.