Current rumours are pointing to the iPhone 5 utilizing Apple’s A5 dual-core processor. This super speedy and powerful processor was first utilized by Apple in the iPad 2 and it is a significant enhancement and improvement to the A4 processor. In addition to the improved processor expectations are high for an improvement in the RAM and overall storage space available.
However other rumours have stated that the reason the iPhone 5 was not released in June (on a similar schedule to that of earlier models) is due to the A5 processor overheating when combined with the new iPhone. If the processor problems are in fact confirmed and Apple is unable to find a solution in a reasonable timeframe, its next model might not be as revolutionary as expected and will only be a small and incremental improvement to the iPhone 4.

The brains of the iPhone 5 will be its newest operating system – iOS 5. Recently released by Apple this new operating system offers some significant differences to its predecessors, most notably cutting the tether to iTunes and the PC in general. Flash unfortunately is still not an option with Apple and while some Android based Smartphone’s have emphasized the availability of Flash on their systems as a key differentiator – the lack of Flash on iPhone’s has not significantly impacted their market share.
Another key enhancement to the new OS is the fact that all software updates are now sent wirelessly and these updates only include the changes – not the whole Operating System!

Surprisingly however there are also rumours of an iPhone Nano with a 3 inch screen. The officially (unannounced) Nano will do away with the Home button making them significantly smaller in size to the current generation of iPhones on the market and these smaller units primarily built with iPhone 4 components, will also be offered at a significantly lower price than other iPhones – thereby potentially opening up the budget conscious market to Apple.
While the iPhone Nano will entice non-Smartphone users to Apple it is also expected that they will chip away at the budget Android handset marketplace also. While there are definitely valid reasons for Apple to create a smaller unit, these rumours are definitely unconfirmed at this time, and in fact sources at Apple have stated that Apple will not be releasing a smaller iPhone.

Specs for the new iPhone 5 are currently pointing to the new iPhone 5 integrating an 8 megapixel camera into its case. While Nokia’s N8 (with a 12 megapixel camera) is still superior this camera and lens – probably supplied by Sony – will be a vast improvement on the 5 megapixel camera included in the iPhone 4 and with an improved LED flash, this might make enough of a difference.

Depending upon who does the talking the iPhone 5 could be completely different in look and feel to the iPhone 4 or it could only have some small cosmetic changes. Some of the more radical suggestions include replacing the glass back with a new metal back – which will also act as the new iPhone antenna. In addition there are details that the bezel itself will be changed and will incorporate touch-sensitive buttons around the newer larger 4 inch screen.

Apple is nothing if not innovative and its design styles and ideas have long been at the forefront of the Computer and Electronics industry. Just like the Ipad 3, The iPhone has led the world and with its huge app store, Apple has a very hefty lead on its competition. As long as Apple does not experience another “Antenna Gate” similar to the problems with its iPhone 4, it should not only be able to maintain this lead but grow it even further and if in fact they do launch an iPhone Nano at a lower price point, they will truly be unassailable!