Apple is expected to launch new iPhone in October
Apple is expected to launch new iPhone in October IBTimes

One device that always manages to attract tremendous pre-release hype is the iPhone. Apple is due to release the next iteration this fall and rumors over its release date and features abound.

The latest one from the rumor mill is that the iPhone 5 with a materially revamped user interface will come only in 2012, and Apple will launch only an iPhone 4S in the fall.

The latest rumor goes against the expectations that Apple would be launching iPhone 5 this fall and would link it to Sprint along with Verizon and AT&T.

Of note, we see an iPhone 4S this fall, an iPad 3, and an iPhone 5 with a materially revamped user interface and 4G early next year. We also believe Apple will move more materially into the 'connected TV' space, Wedbush Morgan analyst Scott Sutherland wrote in a note to clients.

Analysts expect iPhone 4S to have more evolutionary than revolutionary changes and the device would feature a better camera and a different case.

Sutherland also believes the iPhone 5 will have a materially upgraded user interface and will be tied to a major cloud initiative supported by data centers in North Carolina and California. He believes Apple's cloud strategy will be very important and will take the fight onto Google's turf. He expects increased CDMA distribution, seasonality, and the White iPhone to drive more typical seasonal growth, with an iPhone 5 pop in the second quarter of fiscal 2012, around March.

Analysts expect that iPhone 4S would be low-cost, targeted at prepaid and emerging markets. But iPhone 4S is expected to run iOS 5, which will be necessary to run the new cloud-based services. This will maintain the unity of the Apple iOS code base, and likely increase low-cost iPhone shipments, but there could be greater cannibalization of higher-end iPhones as differentiation is lessened.

Based upon our checks and public comments by Verizon and others, we are in the camp that expects only an incremental iPhone upgrade (iPhone 4S) this September, which includes a dual-core processor and improved imaging. We expect the iPhone 5 to arrive by next January, which will include 4G and can work on both Verizon and AT&T's networks, thus allowing CDMA and GSM based subscribers equal access to the new iPhone, said Sutherland in a recent note.