While there's little debate over what Apple's next iPhone 5 will do, there is plenty of pushing and shoving with regards to what will make up the next iPhone.

Industry watchers, analysts and self-proclaimed pundits have concocted endless recipes for what is expected to come out of Apple's stable. We've assembled the most credible voices to look across the broad spectrum of potential features and tell us what is most likely to appear in Apple's next-generation iPhone, set to make its debut at 10 a.m. PDT in Cupertino, Calif.

Larger Display

At first, many thought Apple was going to keep the design of the iPhone 5 identical or extremely close to the iPhone 4. However, numerous pictures of new iPhone cases have been released, which in no way could hold the previous versions of the iPhone. Therefore, it is safe to say the iPhone 5 has been redesigned.

Sterne Agee analyst Shaw Wu, who has sources in Apple's supply chain, believes the iPhone 5 will likely feature a slightly larger display.

The larger-screen rumor has been kicking around for months, dating back to February, where a snapshot out of China depicted the front screen of what looked like an iPhone, but with a larger and wider display. This confirmed an earlier report from component industry tracker DigiTimes, which claimed that Apple was eyeing bigger screens, in part to better compete with Android devices.

Then, in March, purported mold engineering drawings surfaced, depicting a device that looked like the iPhone 4 but with a noticeably larger screen. More recently, a slew of cases hit store shelves designed for a slightly larger but thinner iPhone, but those cases were pulled after a couple of days.

Better Camera

While Apple did improve the camera with the iPhone 4, many expect the camera on the iPhone 5 to be further upgraded. Experts believe the camera will be 8 megapixels instead of 6, and the iPhone 5 will allow for full 1080p recording.

For some time, many believed camera sensor maker OmniVision Technologies would be the dominant supplier, if not the sole supplier, of sensors for Apple's next generation iPhone. But on Aug. 26, OmniVision shares dropped 30 percent after disappointing quarterly results, so it would be surprising at this point if Omnivision were still the sole supplier of sensors for Apple's next iPhone after such a drastic decline.

Whether or not OmniVision has completely lost its position is not entirely clear. The company hasn't mentioned anything about problems with a large vendor. There is disagreement over whether OmniVision has lost some business to Sony, and if so, how much.


Mobile payments have been all the rage these days, but back in March, the China Times claimed the new iPhone would sport a Near Field Communications (NFC) chip to accommodate the need for mobile payments. Later that day, The New York Times also confirmed the presence of an NFC chip.

NFC chips allow users to combine their phone and their wallet. The chip securely stores credit card and payment information in the phone, and to pay for an item, all you need to do is swipe the phone in front of an NFC receiver and the credit card is charged instantaneously. Many believe NFC will be the technology to finally displace the need for carrying around a wallet.

But many are still skeptical about Apple buying into NFC technology. Toni Sacconaghi, an analyst with Sanford Bernstein, believes that the mass implementation of NFC terminals in retail locations could take five years or more to happen.

We do not expect the iPhone 5 to feature an NFC-based payments solution, and instead expect Apple to evaluate and come to market with partners or a complete solution later, perhaps when the NFC infrastructure is more established, Sacconaghi said.

Implanting an NFC chip into the iPhone could add $450 million to $900 million to the cost of goods for Apple's 2012 fiscal year, which could lower Apple's gross margin by 0.4 to 0.7 percentage points. Then, too, it's unclear if Apple and others could command a meaningful cut of the transaction.

Then again, BoyGeniusReport's Jonathan Geller speculates Apple might already be planning to implement NFC terminals in its own retail network.

How Many?

Apple's invitations to the media event featured four icons, including a phone icon with a red number 1; if Apple is offering any clues at all, the invitation may suggest that the company will only unveil one new iPhone instead of two. This notion is further evidenced by the tagline at the bottom of the invitation reading Let's talk iPhone, with the word iPhone being singular.

However, with Apple refusing to comment any further, there is wide speculation that Apple may still unveil two new phones: a brand-new high-end iPhone 5, and a cheaper, slightly-upgraded iPhone 4.

Reuters's Clare Jim and Kelvin Soh report that Apple's suppliers are preparing a lower-cost model of the iPhone 4, which would feature 8 gigs of flash memory, to be released around the same time as the rumored iPhone 5. The phone is intended to be a more price-conscious option for buyers, especially in emerging markets.

Apple's primary criterion for launching a lower-end iPhone is an innovative, category-killer experience, said Mike Abramsky, an analyst with RBC Capital Markets.

A second iPhone would make sense if Apple is in fact expanding availability to CDMA carriers, namely Sprint-Nextel.

Craig Berger, an analyst with FBR Capital Markets, believes Apple will build least 30 million iPhones in Q4, with 23 million of those being the iPhone 5. Similarly, BMO Capital's Keith Bachman raised his iPhone production estimate to 20.4 million from a prior 19.5 million, but writes that the company may ship as many as 22 million units.


AT&T and Verizon are current carriers of the iPhone 4, but Bloomberg's Olga Kharif writes that Sprint-Nextel (S) will begin selling Apple's new iPhone next month on an unlimited data plan. The unlimited data offering, according to Kharif, is meant to give Sprint an edge over the capped data plans of AT&T and Verizon.

Mike Walkley, managing director and senior equity analyst at Canaccord Genuity, concurs with Kharif's estimation.

We believe Sprint[-Nextel] will receive the new iPhone at launch and heavily promote it given the carrier's unlimited data plan, Walkley said.

AT&T and Verizon currently charge for data service on top of voice-service plans. AT&T, which has unlimited voice service for $69.99 a month, offers 200 megabytes of data for $15 a month, 2 gigabytes of data for $25 a month, or 4 gigabytes of data for $45 a month. Verizon's data plans for the iPhone start at $30 a month for 2 gigabytes and rise to $80 for 10 gigabytes, in addition to unlimited voice service for $69.99 a month.

T-Mobile will reportedly refrain from joining the iPhone 5 party. According to CNET, T-Mobile's chief marketing officer Cole Brodman told employees that the carrier would not carry the iPhone 5.


It is still unknown as to whether or not Apple will include 4G capabilities on the iPhone 5.

JP Morgan's Mark Moskowitz believes the iPhone 5 will be a world phone with both GSM and CDMA cellular support, but unfortunately, will not support 4G LTE (Long Term Evolution).

The first generation of LTE chipsets forced a lot of design compromises with the handset, and some of those we are just not willing to make, said Apple's COO Peter Oppenheimer, speaking at the company's April 2011 earnings call.

Scott Sutherland from Wedbush Securities believes Apple will release a brand-new iPhone and an iPhone targeting emerging markets in October, but he says consumers can expect an LTE iPhone in with a materially improved user interface in 2012, without explaining any further.

If 4G is included, however, expect the iPhone to be physically larger. 4G requires a large amount of battery power and Apple has always been careful about battery life.

We continue to pick up indication that [iPhone 5] will not likely incorporate 4G LTE due to battery life issues and spotty network coverage, Wu said. And ironically, if anyone is in a position to fix these weaknesses, it would be Apple.

Wayne Lam, a senior analyst at iSuppli, concludes a 4G iPhone would face two significant hurdles: size, and price.

The iPhone's minuscule printed circuit board (PCB) will have to grow in size in order to support the first-generation LTE baseband processor as well as all the supporting chipset, Lam said.

While many people do want 4G on the iPhone, we will have to wait until the meeting to see whether or not Apple has included it.

Voice Recognition

Apple acquired a voiced-based personal assistant service Siri in June 2010 and has not used it much at all, at least that we know of. According to sources from 9to5Mac, Apple may be integrating this service on the new iPhone to create a powerful new voice-activated personal assistant, not-so-cleverly dubbed Assistant.

It's a simple idea, but a big one. The user holds the home button, and once the microphone interface slides up from the bottom in a clever animation, users simply ask their iPhone for information, or tell it what to do. Users can ask to find directions, set reminders, send texts and e-mails, and even answer math questions, thanks to integration with Wolfram Alpha's knowledge engine.

The Assistant feature will also reportedly let users find their friends using a new application that shares the locations of other iOS device users in real-time. In this way, you could ask Where's Matt? and your iPhone could tell you, as long as Matt uses the service.


Whether Apple's Oct. 4 announcement is a slight upgrade or a major overhaul, Sprint is going to become a carrier, and the new phone indeed features a bigger screen, a better battery, an improved camera, a faster processor and Assistant, is all unclear. Apple could release all of these features or none of them. One thing is certain, however: all will finally be revealed when Apple CEO Tim Cook takes the stage in Cupertino on Tuesday, Oct. 4, at 10 a.m. PDT.

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