The unnamed sources said Apple plans to ship two 2014 iPhones, one with a screen larger than 4.5 inches in size (4.7 inches would fit that description nicely), and a second version with a display of 5 inches plus (again, 5.5 inches is right in the ballpark).
Until now, the iPhone stuck with a 3.5-inch display until the introduction of the iPhone 5, when it crept upward to 4-inches in size. The successor to the iPhone 5, the 5s, retained that screen size, as did its companion device, the iPhone 5c.
One thing missing from the WSJ report that was in the Bloomberg report. The devices will not feature curved screens, something that has emerged on some of the latest devices, including the LG G-Flex and the Samsung Galaxy Round.
It seems as though Apple will scrap the lower-cost plastic case of the iPhone 5c, perhaps making the smaller-screened device its budget device. The sources said that both of the new models will feature metal casings similar to that of the iPhone 5s.
The phones are expected to ship in the second half of this year, with the smaller of the two devices further along in development. That still-unnamed device is already being prepared for mass production, the sources said, while the larger-screened version is still in the preliminary stages of development.
It's unclear if these larger-sized displays would mean that developers would have to manually "optimize" their apps for them. When the iPhone 5 was introduced, apps not optimized for the new screen size would appear with banding, letterboxed or pillar-boxed depending on the screen orientation.
This may be something that developers will need to adjust to -- a sort of iOS fragmentation.