Apple Inc. is gearing up production of the iPhone 5, but some analysts say it's unlikely to be revealed before 2012. Yet there seems little doubt, considering Apple's projection of selling 25 million iPhones by the end of 2011, that the release is right around the corner.

In addition, Taiwan-based notebook maker Pegatron Technology recently received an order for 15 million iPhone 5 units from Apple with a September shipment date.

Speculation about possible upgrades to iPhone 5 way has escalated. It is reported it will boast an 8MP dual-LED flash camera with 1080p video playback and panoramic photo capture, A5 processor, edge-to-edge display, 3.7-inch curved glass screen, tear-drop design, thinner casing and a SIM-less design.

It is also expected that iPhone 5 will be running on iOS 5, the newest of the OS versions. The new iOS 5 is expected to come with 200 new features that will include Improved Notifications System, News Stand and iMessage.

The new Apple iPhone 5 is expected to have a bigger edge-to-edge 3.7 to 4-inch curved glass screen, and is rumored to sport a 1.2 to 1.5 GHz dual-core A5 processor, which powers the iPad 2, with probably a 1GB RAM. It is expected that iPhone 5 will have 16/32/64 GB internal storage.

In addition, Apple has filed a patent application related to 3D picture taking to the US Patent and Trademark Office later in March, according to an AppleInsider report. The filing described a system that would be capable of capturing, processing and rendering 3D images with the additional dual-camera hardware.

For the uninitiated, Apple has obviously passed up what would have been a normal release date for iPhone 5. Instead of unveiling the iPhone 5 at the Worldwide Developers Conference in June, Apple gave a sneak peek into the possible software upgradations of the next iPhone when it unveiled the iOS 5. Apple said the iOS 5 would be ready for rollout in the Fall.

Deutsche Bank analyst Chris Whitmore kicked up a storm by predicting that Apple will launch a cheaper iPhone 4S in September, while Keith Bachman of BMO Capital Markets says the iPhone 5 will launch in mid-2012.

Whole lots of theories about how a cheaper iPhone will fit into Apple's global strategy and its quest to lead the global smartphone market emerged following this report. RBC Capital analyst Mike Abramsky said he thought the baby iPhone, the cheaper version for the emerging markets will not be launched until 2012.

We continue to expect Apple to launch a smaller, prepay iPhone – but more likely in 2012, both to avoid iPhone 5 cannibalization, and as its design may deeply leverage iCloud services for convenience and affordability, Abramsky wrote in a note to clients.

Meanwhile, Apple is facing immense threat from Android as Android smartphones and tablets are going to flood the U.S. market soon. There has been a new launch, leak or rumor every day.

In terms of releasing upgradable version of OS in frequent intervals, Apple has failed to keep the pace with Android. However, Google Inc. has covered the distance by releasing 3 Android versions in last 2 years with a commitment to come up with a new version in every 6 months interval.

Even to tap the tablet market effectively, Google has developed a separate version of Android – Android 3.0 – also known as Honeycomb. There has been recent news that Google is working on its next version of Android operating system -- Android 4.0 -- also known as Ice Cream Sandwich, which will combine the features of Honeycomb tablet OS and Gingerbread phone OS.

When Apple released its iPhone 4 in 2010, the phone recorded sales of 1.7 million units within four days. Apple will be aiming at reaching the same scale with the launch of iPhone 5 too.

In 2010, Apple had faced a few number of Android devices but now too many Android devices have flooded the market. This can lead to confusion among the new buyers in choosing a good smartphone.

So in order to compete with Android, Apple should be launching iPhone 5 with iOS 5 and all expected features by this year. Apple certainly knows how to surprise and it already has a few things in place like iCloud which can steal the thunder from Android devices. Let's wait till the announcement comes from Apple.

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