The latest crop of Apple-related rumors suggest the iPhone 5's successor could make an appearance as soon as this spring. In addition, whispers from anonymous Chinese sources indicate that Apple is exploring a new touch display technology (Chinese) developed by display-maker (and Foxconn subsidiary) Chimei Innolux. Known as "Touch On", the company's approach to making touchable display panels could supplant the "in-cell" design adapted for the iPhone 5.
One of the new features touted with the introduction of the iPhone 5 was its in-cell touch technology -- a physical marriage between display and touch-sensing electronics which were essentially laminated together. Despite the obvious, costly implications of breaking (and repairing) an entirely fused-together display, the in-cell method of producing touch-capable panels provided Apple with enticingly thin display assemblies by removing the digitizer layer. As a result, Apple was able to shave an appreciable amount of thickness from the device.
Interestingly though, in-cell -- like most other touch technologies -- suffers from an appreciable amount of input lag. In the iPhone 5's case though, in-cell has been attributed to a noticeable increase of lag over previous models. In fact, the lag has where quick finger-work is important.
Touch On is believed to address such lag issues, but should also enable Apple to keep their displays (and phones) every bit as thin as in-cell currently allows. This is where rumors of Apple turning to Chimei Innolux make sense, but don't let that fool you -- rumors aren't always correct, of course.