What to expect in Apple's iOS 5

From a possible larger screen, to aluminum backing, there is no shortage of speculation for what new hardware Apple will pack into its next generation iPhone 5. But what about its software?

The iOS -- or the operating system that powers the iPhone -- is the maestro that manages all that fancy hardware running, and turns that from a pile of silicon to a rich user experience. It last saw its major update right around the time that the iPhone 4 was released.

The changes helped make better use of the new hardware in the new device. If Apple follows the same pattern, then the market can expect a new iOS version 5 towards the end of the year as well.

Just Monday, Apple announced a developer conference where it said it will focus on, among other things, the iOS, lending credence to the fact Apple has something up it's sleeve for the new software.

But just what will be included?

Analysts are contending that the new software will definitely be revolutionary, but what that exactly means is only beginning to be understood.

Generally, the new iPhones should interact more with the cloud, or data and apps stored on servers that users can access from their devices on the go.

The new cloud-based features represent a significant step forward for the operating system, according to Jefferies analysts Peter Misek.

In line with this theory, Apple appears to be building what could be the largest data center in the world in Maiden, North Carolina.

The half a million square feet center, expected to go live this spring, will give Apple massive computing power to serve its hundreds of millions of customers with over the air services.

Namely, there will be five primary duties of the new cloud, Sanford Bernstein analyst Toni Sacconaghi told investors.

Firstly, all this computing power will allow for a greater build-out of Apple's iTunes store, the ubiquitous platform for buying apps music and video. But more importantly for Apple, this will also host its iAds platform, allowing it to monetize apps and content.

The analyst also believes Apple will create a digital locker of sorts, allowing users to store their music on the Web and then listen to their collections on other Apple devices. This should make accessing your files and media easier, regardless of where you happen to be.

Amazon announced its own service to do this, just this week, and Google also has plans to roll out something similar.

But perhaps the most exciting is such a setup would virtually give something small like an iPhone virtually limitless computing power. The device, with limited megahertz, can connect to a massive server to offload calculations and receive the results.

The concept isn't new.

In 2009, AMD announced its Fusion Render Cloud that would do intense graphical calculations and send those results back to users, alleviating the need for powerful client-side computers.

Google, which has its own massive server farms, employs similar services with its Android powered devices. Servers interpret voice commands and even photographs on behalf of Android users, a task that would be impossible for limited mobile processors.

Sacconaghi believes Apple will do something similar, and cites the company's recent purchase of Siri, a company that made a voice controlled app as evidence.