Apple's next iPhone may be equipped with an in-cell touch screen, saving precious space and allowing for a lighter device, according to a new report.

Having touch sensors embedded into the thin-film transistor (TFT) LCD display rather than in an extra layer maintains the display?s original thickness.

According to sources in Apple's supply chain, Apple new iPhone is expected to adopt in-cell touch panels rolled out by Sharp and Toshiba Mobile Display (TMD), Digitimes.com reported today.

Apple's new iPhone is expected to be released in the third quarter of 2012.

Apple's current suppliers TPK Holdings and Wintek use more standard glass on glass touch technology.