The question is, will it matter?
In-cell touch is not, to be clear, a radical change from the capacitive touch displays that Apple, Samsung and other phone manufacturers currently use. So one needs to look at how capacitive touch screens ordinarily work to understand the difference.
A capacitive touch screen works the way it does because the glass on top has a layer of indium tin oxide (ITO) below it. ITO is transparent but also electrically conductive. When a finger approaches the layer (as it touches the glass), it acts like a capacitor. That change is detected by the circuitry in the phone, and the finger's position is tracked. Below the ITO layer is another layer of glass, which has a second layer of ITO on it to isolate the liquid crystal display from electrical noise.
The downside to this is that the LCD image has to get through at least two layers of glass and ITO. Even the clearest glass reflects and refracts some amount of light. LCDs have backlight (they won't work without it) but even so, it affects the clarity of the display.
In-cell partly solves this problem by combining the LCD and touch sensing layer. That means there is one fewer sheet of glass, and that much less reflection and refraction. It also means that the backlight for the display doesn't need to be quite as bright. So the big effect might be sharper displays.
But Martin Reynolds, a managing vice president at the Gartner Group, isn't so sure in-cell will be a game changer. "Maybe if you held the displays next to each other, you would see the difference," he said. But Reynolds doesn’t think the technology will matter much to consumers, at least initially.
The big effect of this technology will be reducing manufacturing costs, which means more to the companies that make the phones. Eliminating a single sheet of glass may not sound like much, but spread out over 1 million iPhones, the savings adds up.
Jennifer Colegrove, vice president of display technologies at DisplaySearch, noted that the display itself is a bit thinner, so it might allow for more electronics to be packed into devices, and it also could make the phones lighter. But that isn't something most consumers are likely to notice.
Gartner’s Reynolds added that the displays are so thin now – the glass layers are on the order of half a millimeter – that it won't allow for any radical changes in phone design.
One area that eventually will be affected is the prevalence of LCD displays. Apple's displays are all LCD. But the next big thing may be OLED, or organic light emitting diodes.
In OLED displays, the light comes from the diodes themselves; there is no backlight. This means one fewer element drawing power and, crucially, one less layer. That adds even more room for electronics and batteries. But Reynolds doesn’t think that technology will be coming to the iPhone anytime soon.
"I'd be surprised if Apple moves to OLED in the iPhone 5," Reynolds said.