Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
More sensors

The next gen iPhone will have an upgraded camera on the back, say 5 megapixels, and a front facing camera for video chat. There were also some rumors going around that some additional sensors would be added to the front like an ambient light sensor so that when you put the iPhone in your pocket unlocked it would realize the light change and lock itself. Definitely new internal hardware so that it can support multiple tasks more easily and a better graphics card for some more advanced apps.

Since the newest iPhone update didn't really add much to the features of the phone itself other than 3G and GPS Apple will have had a solid year and half to work on overhauling the entire phone so we can all be assured that the next update to the phone will blow us all away.
 
This may not be the next iPhone, but I see these changes eventually happening, when they fully change the iPhone's form. I'm talking like 2-5 years down the road for many of these.

1) I think that the home button will be done away with, at least on the front of the device and they will also move the earpiece for phone calls, allowing for the entire front of the device to be nothing but screen. they could possibly put the earpiece on the back, meaning you would essentially use the back of the phone for calls, but I think that would be a step backwards as far as form goes. At the very least I'd expect the earpiece to be moved further towards the edge to take away more "dead space".

2) better camera + photo editing software built in. I think the main reason apple didn't put a better camera in at first is they didn't want to waste too much time into it when they were building the device from the ground up. A nice camera isn't a game-changing feature, so why bother with it? Now that they are trying to figure the next way to change the game, they will put in a camera and supporting materials that will truly blow people away.

3) full voice control. Not just voice dialing, but voice ipod control, voice texting, voice calendar (ie you have your headphones in say "appointments for the day" and it spits out what you have on tap for today, you say "make appointment for january 10th, 11 AM, dentist" and it puts that in your calendar, voice stock quotes, voice email, voice weather, etc.

4) MobileMe actually works and is included in the cost of the iPhone as a el jobso style mandatory service. I think that MAYBE in two years apple will have got mobileme under control and it will be ready for the big stage. you will have a page that will allow your friends to invite you to events, which then get sent to your iPhone as little invitation thingies on your calendar (denoted by the famous red circle with the number in the corner). Friends (or bosses) can access your calendar.

5) as kind of an expansion on 4, as more and more people get the iPhone, something like "the iPhone network" becomes workable. Meaning apps that allow you to do awesome things from iPhone to iPhone. I can't even speculate here, but I can only imagine what apple can do with 3G and a ton of people using their device as far as creating a nationwide network goes.

6) full blown doc support.

7) full video out. power point presentations, photos, movies, interwebs, etc.

8) better speakers

9) things we never even thought about.
 
They don't need to give it Wow Factor. They just need to slap an Apple logo on it, have El Steve point at it during a keynote and say "Boom!" and every last Apple fanboy will be waiting in line for it. That's how apple works. :)
 
Not always, but often Apple choose the feature that is most likely to be compelling or at least marketable to the consumer as the name of the revision. We had PowerMacs appended with G4 and G5 as the proc was the marketable feature. We had iPod photo and touch. There was iChatAV. And obviously the iPhone 3G.

While it might not be the best feature, I think the will do a front mounted camera and add software for video chatting and this will be the flagship feature. Perhaps it will be named iPhone Video or iPhone AV, but probably some name that promotes the primary feature addition. I think this may have been the reason for not including it in the 3G-so they have a marquee feature to promote for the next version. Doing an improved chipset, 3G chip or battery would not allow them to promote it. What would they call it? "iPhone with new non-sucking 3G chip", "iPhone No Lag Keyboard", "iPhone All Day Battery"

Edit: Not to say they won't improve the hardware, but that isn't a mass marketable feature.
 
While it might not be the best feature, I think the will do a front mounted camera and add software for video chatting and this will be the flagship feature. Perhaps it will be named iPhone Video or iPhone AV, but probably some name that promotes the primary feature addition.

This would take a while because battery technology would have to dramatically improve to make video chat realistic on the iPhone. Video chat would be gigantically battery intensive on a device that is already at the edge of usable battery life for a phone. Apple just is not going to make the iPhone any larger than it is currently and they'd have to be able to essentially double battery size while adding another camera. And do all of this while maintaining the iPhone's beautiful form.
 
This would take a while because battery technology would have to dramatically improve to make video chat realistic on the iPhone. Video chat would be gigantically battery intensive on a device that is already at the edge of usable battery life for a phone. Apple just is not going to make the iPhone any larger than it is currently and they'd have to be able to essentially double battery size while adding another camera. And do all of this while maintaining the iPhone's beautiful form.
True. But perhaps with small improvements to batteries and major improvement in the efficiency of the chipset and chips they will be able to squeeze enough to make it viable.
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.