Apple is a company well known for its secrecy and it is part of its strategy to surprise the market with unexpected features and more often than not, for omitted features. Naturally, whenever a product update is due, rumors start flying and tech enthusiasts around the world start feverish discussions on what may be in for the next product release. Not being immune to such speculative talk, a couple of friends and I made it a habit to muse on upcoming product releases and take bets. To keep a record of that, here is my attempt to predict the next iPhone update, due sometime this year between June and September.

Hardware updates

I don’t expect Apple to change the physical case of the current iPhone 4 design, as I would assume they don’t want to upset the market that just bought into new accessories that fit the new design, as well as inflict major manufacturing changes on accessory makers. Also, sticking to the current design will let Apple increase their margins as they continue benefitting of economies of scale of the current design.

1. New CPU, possibly the A5 found in iPad 2s. This will basically improve speed and battery life.
2. Unified radio baseband from Qualcomm, delivering GSM (HSPA) bands as well as CDMA. No T-Mobile support for AWS bands.
3. 1GB memory, delivering more speed and multitasking capabilities
4. Improved front facing camera to support HD Facetime currently available on MacBook Pros. No change to rear camera.
5. Improved battery life, probably delivered without changing the density of the battery itself, but rather through improved power efficiency from a possible CPU upgrade.

Hardware omissions

Every year there are plenty of new technologies announced and geeks around the world start dreaming of having the latest *insert buzzword here* technology included in their gadgets. I think that Apple however carefully selects the features they want to support and from all the rumors of things that could be included in the next release, here’s a list of things that Apple will explicitly not include as I don’t see how these items would align with Apple’s current product strategy.

1. No NFC support. I don’t expect Apple to spend money on parts not widely used on the market. NFC technology has a lot of future potential, though I don’t think Apple will support a technology that has virtually zero usage scenarios at this time. For NFC usage scenarios to take off, Apple would have to partner with a major financial institution like Visa or Amex and would expose itself to new market forces the company is currently not dealing with. The financial industry is not Apple’s expertise and any such solution would likely not work internationally.
2. No 4G (LTE) support. I would not assume that Apple wants their product to operate on immature and spotty networks with poor coverage outside of urban areas. I expect Apple to wait for the networks to be more widely available, become more reliable and await some international standardization. Apple’s bottom line is greatly affected by whether it can source the same components for all its devices sold across the world, such as Qualcomm’s CDMA/GSM radio used in the iPad2 for Verizon networks, thus driving costs down and not requiring different designs and SKUs for different markets. Furthermore, there is no benefit of increasing the available bandwidth to the device from the current theoretical maximum of 7.2MBits (HSUPA) to several dozens of MBits available with today’s LTE networks, as there are no common mobile applications that would benefit from such a bandwidth increase. LTE is currently a very power hungry technology which would just negatively affect the common usage scenario and thus only reduce the battery lifetime without delivering any tangible benefit to the average iPhone buyer. Apple might support HSPA+, though that would rather be an iteration on already available UMTS technology used in GSM networks and not require new networks to be built.
3. No update to the retina display. For a smartphone, the display is near perfect as it is and I don’t think there is currently much room nor need for an improved screen. If anything, Apple may choose an improved screen design to reduce costs, however on the physical specs I don’t expect any changes to be announced. Definitively I wouldn’t expect Apple to move to AMOLED screens.
4. No changes to the SIM infrastructure. Just last year Apple required operators to migrate to the micro-SIM standard and making yet another change would probably not bode well with the many carrier partnerships around the world. Rumors of a “soft-SIM” or embedded SIM card which could be dynamically provisioned and migrated between operators seem unlikely to materialize, as Apple is too much vested with its carriers and current subsidy models to deliver a successful product.

Software updates

1. Rumors strongly suggest that Apple will come out with a new cloud offering, probably covering e-mail, music streaming and potentially video chatting (Facetime). I mostly agree that such an offering would make sense for Apple.
2. Improved Facetime experience (higher bandwidth efficiency), potentially opened for 3G use.
3. Some improvements to the multi-tasking UI. I believe that Apple could deliver a better experience in terms of usability and intuitiveness of the current multi-tasking solution.

Last but not least, I predict the next iPhone to be called, the iPhone 4s. I see the above improvements similar to what Apple did with the iPhone 3GS, which wasn’t a groundbreaking new design, but much rather a matured design within a major product cycle. Come next year, Apple may be adopting new technology such as LTE which would then warrant for a new name. Up until then, my bets are on updates more commonly seen with a the mid-product cycle, than a new product all together.

It will be interesting to see what will materialize of all the above predictions. In the meantime, feel free to add your own predictions to the comments section.