Rumor states that iPhone 5 won’t have Home Button but will include Larger Screen.
A new rumor has surfaced which states that the new Apple iPhone 5 won't have a home button at the bottom and that space would be reserved for a larger screen/display.
Assuming that the workspace remains of 960 × 640 pixels , Apple could increase the height of thescreen to about 1,148 × 640 pixels (more or less, of course). Current applications exploit the conventional screen area, leaving off the pixels in excess seats in the lower part of the body or showing those elements that are currently hidden are displayed when you double-click the Home button.
This could be because the latest Android devices have little or no buttons and all navigation could be done form the touch panel so Apple's trying to copy the same thing to integrate it in the next generation iPhone. Most of the iPhone fans/users aren't in favor of this but they think the new design is creative.