According to a recent report in Digitimes, Apple is prepping plans to manufacture a 12-inch MacBook Air during the third quarter of 2014. As it stands now, the MacBook Air comes in 11 and 13-inch flavors so it remains unclear if Apple's svelte notebook will be available in three distinct sizes or if one of the aforementioned form factors will be shown the door.
The sources pointed out that Apple is releasing a 12-inch MacBook Air because its 11-inch model has a screen size similar to its iPad series products and iPad's increasing sales are impacting MacBook demand and therefore the company is looking to establish a clear boundary between the two product lines.
As for when Apple may stop producing the 11-inch MacBook Air, the sources pointed out that the company so far still has not yet set plans to adjust the 11-inch model, but phasing out the device is a logical plan for the long term.
It remains to be seen if Retina Displays will hit the MacBook Air lineup later this year.