iPhone 5 rumors: Apple to release iPad Mini and 4 inch iPhone 5 in 2012?

According to the The Korea Times, a senior at LG confirmed that the Korean manufacturer is currently working on new display that will power the next iPhone 5.

Apple is rumored to be negotiating a $1.1 billion deal with a view to equipping its smartphone with a 4-inch screen instead of the previous 3.5 inches, and the iPad with a 7.35 inches display in addition to the existing 10-inch format.

This format would compete with the Galaxy Tab, Kindle Fire or HTC Flyer.

What do you think? Which do you think would be the perfect size for a iOS tablet?