But if you had an iPhone 4, and you were offered an upgrade to an iPhone 5 from your carrier signing up for another 18 months / 24 months - there is very little incentive in just an A5 processor.
I don't own an iPhone 4, there wasn't enough incentive to upgrade my 3GS which shares the same SoC architecture with the iPhone 4 (thus the reason it runs iOS 5 just as well as a 4 and has better FPS in games thanks to lower native resolution).
The arguments you're bringing up are the same ones the 3G folk were saying about the 3GS (never mind that they were ignoring all the other goodies the 3GS was getting on top of the better SoC) and yet they felt quite silly the day that their phones could hardly run iOS 4. Meanwhile, the 3GS has had a much longer lifespan than the 3G since it will be able to run it's 3rd iOS revision with the full feature set at acceptable speeds.
So yes, again, iPhone 4 with A5 as the iPhone 5 ? No brainer, it will sell like hotcakes. And if you think that's all Apple is going to do, you're dead wrong anyhow. The iPhone 3GS is a perfect example of why a major revamp can be made in the same case design as the prior generation. The 3GS was a huge leap forward over the 3G.
An A5 chip makes it worth upgrading and spending £500 or $200? Really?
To me ? Yes. Of course, I'll also be getting a "Retina" display, a LED flash for my camera, facetime, the Wifi Hotspot instead of just the BT/USB version and a few other features, plus whatever else is new with the iPhone 5 over the iPhone 4.
Remember, not all of us are upgrade fanatics. For me, the iPhone 4 wasn't worth it. A couple of mhz more with a decrease in gaming performance because of the 4 times higher pixel count. My 3GS was a no brainer last year, an A5 equipped iPhone is a no brainer this year.
Personally in my opinion only if your not currently on an iPhone 4 - and your carrier is offering you a good upgrade pricing subsidy from a 3GS or other handset.
I'm considering buying it unlocked myself and not renewing my carrier's contract commitment.