“Retina Display” was a great marketing catch introduced by Apple with the iPhone 4. It basically describes a pixel density on a screen which is high enough to render individual pixels invisible. The iPhone 4S maintained the “Retina Display” and the latest iPad introduced it on the larger form-factor.
However, according to recent reports — and treat this accordingly — Apple is working on a five-inch “Retina Display”-enabled device which will probably see the light of day next year. There were all sorts of rumors around the next iPhone: one of them even talked about a huge 4.6-inch screen.
It is unlikely for Apple to go that big with its next smartphone and it is also unlikely for the Cupertino-based company to enter the “phablet” market alongside Samsung (Galaxy Note) and LG (Optimus Vu). The rumored iPad Mini is said to have a 7-inch-ish display (though the likeliness of a smaller Apple tablet is also questionable).
Apple might experiment with different screen sizes for different prototypes; they do that often. Also, it could be that the company is preparing a larger iPod Touch, or a new media player, if you will. You can speculate to your heart’s content in the comments below. The two rumored resolutions for the five-inch “Retina Display” are 960 x 1,600 pixels and 960 x 1,280 pixels.