Whispers have been circulating for months about Apple releasing a larger iPhone later this year. Since the original iPhone launch, Apple has kept the iPhone’s essential dimensions intact, and we still have the same 3.5-inch display size Steve Jobs demoed at Macworld in 2007. While the rest of the smartphone industry has been experimenting with all kinds of crazy screen sizes and aspect ratios, Apple has stuck with a simple 3:2 aspect ratio and 3.5 inches.

There have been plenty of arguments made for why Apple will release a 4-inch iPhone in the future, but one smart forum user has put together an argument that trumps the rest.

Case company Hard Candy sold thousands of cases for a mystery Apple device that it believed Tim Cook would unveil yesterday.

Customer’s were so excited by the prospect of a jumbo iPhone with a 4.44-inch diagonal screen, they pre-ordered a couple of thousand cases based on the rumor.

“Crazy day,” said Hard Candy CEO Tim Hickman after the Apple event. “We have to cancel a few orders. Two thousand cases were ordered since you ran your story. That’s bad ass! Apple consumers love, love, love to play in this world.”

Case company Hard Candy is busy manufacturing 50,000 cases for a mystery Apple device.

The device probably looks like the mockup above. It might be the iPhone 5 or a new, bigger iPod touch. It has a 4.44-inch diagonal screen, which is much larger than most observers are expecting for a new iPhone.

Whatever it is, Hard Candy expects Apple CEO Tim Cook to unveil the device at today’s press event. And the company is busy churning out a range of different cases that will be on store shelves when the device ships.

Could this be the iPhone 5? The picture was posted to MacRumors’s forums, and was snapped at the office of a French cell phone company, according to the forum member who posted it.

Apple may be prototyping an iPhone 5 with a tapered design, a larger 3.7-inch screen and a gesture-sensitive Home Button.

This is according to the ex-Engadget crew at the new “This my Next” website, who whipped up the mockup above to illustrate the various rumors they’re hearing.

• New design: Apple is testing several prototypes (we all know this) and one of the leading candidates for the iPhone 5 is thinner than the current iPhone 4 and looks “more like the iPod touch.” It has a teardrop shape – thinner at the bottom than the top, like the new MacBook Air.
• Gesture-sensitive Home Button: The Home Button will be bigger and will understand a gestures. “Our sources say that gestures are definitely coming in a future version of iOS,” says
• Larger screen: the screen will go up to 3.7-inches, not 4-inches as rumored. It will keep the current resolution, dropping pixel density goes from 326 to 312, but will still be a Retina Display (it’s still above 300ppi).
• No Bezel: Screen will be edge-to-edge, occupying the entire front of the iPhone. That means no bezel (or almost no bezel).
• Hidden earpiece & mouthpiece: The earpiece and sensors are behind the screen itself.
• Inductive charging: It may or may not have wireless inductive charging. Crystal ball is cloudy.
• NFC: Likewise it may or may not have NFC.
• Global radio chips: It’ll be based on Qualcomm’s dual GSM/CDMA Gobi chipset, which means it’ll work on a ton of GSM and CDMA networks worldwide, most importantly in China.

Joshua Topolsky warns, however, that none of this is set in stone: “Keep in mind that this info isn’t fact — we’re getting lots of threads from lots of places and trying to make sense of the noise. The versions of devices our sources are seeing could be design prototypes and not production-ready phones. Still, there are strong indications that Apple will surprise a public that’s expecting a bump more along the lines of the 3G to 3GS — and this is some insight into where those designs might be headed.”