n unsourced report from Sohu.com, a Chinese website, claims the iPhone 5 is delayed because Apple's A5 processor (currently in the iPad 2) is overheating in the iPhone 5 (via Google Translate):
Due to the emergence of Apple's current A5 processor overheating problem, so Apple will not soon be launching a new generation of the iPhone 5 smartphones, but Apple will launch this fall is still an iPhone 4, enhanced mobile products or the name iPhone 4S, this iPhone 4S is mainly based on the iPhone 4 on minor upgrades and no significant upgrade.
Apple is widely expected to introduce a new iPhone later this year, and regardless of whether it is dubbed the "iPhone 5" or some other name, there has been considerable disagreement over whether the device will be a major revamp or simply a minor upgrade (or both, by launching two new phones) to the existing iPhone 4. Some have suggested that the confusion stems from Apple testing the substantially-revamped iPhone 5 internals within iPhone 4-like enclosures for secrecy, so it is far from certain just what Apple is planning to introduce for its next iPhone update.
http://9to5mac.com/2011/07/14/rumor-iphone-5-not-arriving-soon-because-the-a5-chip-is-overheating/