There’s got to be a nugget of truth in there somewhere.

Per the sometimes-reliable cats at DigiTimes, the next-gen iPhone may adopt “in-cell touch panels,” integrating the display and touch layers of the device’s screen into one component, according to DigiTimes’s Taiwan-based supply chain sources late Thursday night. The sources claim that display companies Sharp and Toshiba Mobile Display are likely to supply Apple with the parts.

Current iPhones use multiple separate layers to comprise the touch screen, including a transparent conductive layer that sits on top of the LCD display layers and registers touch input. The rumored in-cell touch displays combine these layers into one, resulting in an increase in touch response performance and a reduction in weight and thickness.

Unfortunately, in-cell touch displays are significantly more expensive to manufacture and have a lower yield rate than traditional displays with separate layers.

Apple currently sources iPhone displays from TPK Holdings and Wintek, neither of which have in-cell technology ready for production. TPK is working on implementing a “touch on lens” solution, an alternative to in-cell that can scale up to larger sized displays, but it will not be ready to begin production until later this year. Sharp and Toshiba Mobile Display have lines ready to go and are expected to begin production this quarter.

Stay tuned for additional details as they become available and please let us know what’s on your mind in the comments section.