Rumor mills have had the sway over iPhone 5 news and there have been umpteen reports endorsing as well as discounting the chances of the new iPhone being released by Apple in September. However, a Bloomberg report has quoted two sources, who are familiar with the product, as saying that iPhone 5 will be unveiled in September and that it will have a smarter chip and a better camera, among a host of other bells and whistles.

The report also strengthens the theory that Apple delayed the launch of the new phone because it wanted to roll out the new iOS 5 features onto the new device. Usually Apple releases its new iPhone in June, but this time round, that convention was flouted. While the postponement of the iPhone 5 release disappointed fans, it also sowed confusion in the smartphone market as to what Apple's real intentions were.

More importantly, many tech analysts assessed that Android OS-based smartphones will have a field day if Apple doesn’t introduce a new phone at the earliset. When comparisons were made between the latest Android phones and the iPhone 4, the verdict was not in favor of Apple. Was Apple getting feet of clay while the Android breed got nimbler set of wheels?

Or was Apple just biding just some more time so they could milk the market dry through the White iPhone 4, which was launched in April?

The better theory was that Apple would wait until the iPhone 5 features are ready to roll out. Apple would not want the next iteration of the iPhone wanting when compared to the myriad Android phones in the market. But then Google Nexus 4G zoomed in closer on the rear view mirror. Google's LTE phone had obvious advantages over the purported features of the iPhone 5. And Nexus 4G would probably hit market around Thanksgiving. So, will not Apple find a mighty competitor when its newest iPhone is just a couple of months in the market?

Hence rumor mills focused on other possible release dates. An earlier release around July/August? Or will the iPhone launch be postponed well into 2012, in which case, Apple could take competition head on with new case design and other hardware features?

The Bloomberg report buttresses further the theory that Apple delayed iPhone 5 release to roll it out on iOS 5. The new phone will run the iOS 5 operating system Apple previewed at a developer’s conference this month, the report says. Codenamed “Telluride,” it will feature already-announced features such as improved messaging and photo-sharing, one person said. It’s also designed to run on all of Apple’s mobile devices, this person said. Until late last year, iPads, iPhones and iPod touches used slightly different versions of iOS.

Following is a quick look at iPhone 5 features revealed so far through image leaks and revelations by sources.

Top of the list of features are the 8MP camera and A5 processor. CNET reported that iPhone 5 will have an improved flash unit for its camera. Citing industry sources, the report says Apple has reduced orders for iPhone 4's current LED flash.

This theory is supported by the leakage of images last month which suggested the camera sensor and flash unit would be separated. Moving the flash further from the lens as well as updating its design could improve photo quality, albeit marginally, according to CNET.

It was reported earlier that iPhone 5 will have panoramic photo capabilities and 1080p Full HD videos. An iOS code section revealed that the next iPhone will let users take panoramic photos with the photo app.

And then there have been rumors about iPhone 5 turning into a social networking tool. If this happens the iPhone 5 is going to become your portable social network. The phone analyses your habits, tastes, lifestyle, aptitudes, travels and the like and finds people who share the same bandwidth. And then it tells you if a potential friend is in the vicinity. Conversely it allows you to be found and befriended by other iPhone 5 users.

Now there is more evidence that Apple is prepared to dare the likes of Sony, Microsoft and Nintendo and vie for the gaming pie. The warrior is iPhone 5 and the arsenal include the A5 processor with a dual-core graphics core and the most powerful mobile graphics processing architecture built to date.

New rumors that float around suggest the iPhone 5 will have strong gaming capabilities supported by multi-core A5 processor and Imagination Technologies’ PowerVR Series6 mobile graphics processing architecture. These are not confirmed, but highly probable.

According to media reports, Apple could be one of the companies that will get Imagination Technologies’ PowerVR Series6 mobile graphics processing architecture. It was reported by nextiphonenews that Imagination Technologies is going to license its latest Rogue processor to six important partners. While it is confirmed that among the six are ST-Ericsson, Texas Instruments and MediaTek, the guess is that Apple is among the list as well.

In March this year, iDealsChina showed in its website what it said was a leaked image of the iPhone 5 phone. The handset's screen looked larger and the hardware was bigger overall.

There were also reports in the past saying that Apple was spending an amazing $4 billion on some display technology for the new iPhone which would facilitate a much larger display on the same encasement.

An image published by a Chinese reseller of Apple parts showed what looked like the digitizer panel of iPhone 5. If the image is authentic then the new iPhone will have a 4 inch display but within the same encasement, made possible by a technology that extends display over to the edges of the phone.

The Boy Genius Report predicted this week that the device will have radical design changes. BGR said it has independently confirmed that the next-generation iPhone will be far more than just an updated version of the existing model. The report affirms that the upcoming iPhone 5 will have a radical new case design.