The rumor was initially reported around May where it was suggested that the next-generation iPhone will sport a curved cover glass, somewhere along the lines of the previous generation iPod Nano. However given all the recent rumors of the iPhone 4S/5, there has been no mention of curved cover glass, so perhaps this latest rumor may not hold true for the upcoming release.
Regardless whether we will actually see curved cover glass, according to Digitimes, Apple has been reported to have bought glass polishing equipment for their suppliers, namely Lens Technology, Fuji Crystal and G-Tech, with the former two companies supplying mainly for iPhones, and G-Tech who mainly supplies for the iPad. Digitimes also reported that other companies are also working on products with curved cover glass to give them an edge over the competition.