The preparations of the iPhone 5 have begin. Sharp has already started shipping smartphone  screens to Apple and it is touted that these screens will become a part of iPhone 5.

Takashi Okuda, President, Sharp said simply, “Shipments will start in August,” during a press briefing following the company’s earnings release Thursday.

Sharp is in bad shape financially. Okadu was in no mood to talk about the awful earnings of the company i.e. operating loss of around $1.76 billion and the announcement of 5,000 job cuts by next March.

Sharp was a part of LCD price fixing scandal, which was concerned with a $114 million antitrust settlement, as well as an additional settlement to Dell and two other companies for around $200 million.

It came as no surprise when Sharp did not reveal much about its arrangements with Apple. It is expected that iPhone 5 will be 4-inch tall (Reuters sources concur) and in-cell panel technology has been used by the engineers at Apple to achieve a thinner display. iPhone 5 will be thinner as compared to its predecessor and may have a glass back.

The buzz is that Apple will announce the iPhone 5 along with a smaller iPad September 12 and the phone will hit the market September 21.