here goes.
Design:
* redesigned outter shell with stronger polycarbonate or other material; strength and no more crack issues. Cheaper for hardware replacement expense for Apple (improved share pricing), and better consumer confidence.
* Get rid of the silver lining. This thing is a gold standard now in terms of tech & customer satisfaction, and should reflect this. The industry has copied it to death now. I'm not saying gold but different design.
Hardware:
* T.I. OMAP4340/4430 or the Samsung equivalent (no LESS).
- Dual-core ARM® Cortex™-A9 MPCore™ with Symmetric Multiprocessing (SMP).
- Integrated POWERVR™ SGX540 graphics accelerator drives 3D gaming and 3D user interfaces.
- IVA 3 hardware accelerators enable full HD 1080p, multi-standard video encode/decode.
- Up to 150 percent performance increase at the same frequency versus the ARM Cortex-A8 core
- OMAP4430 operates at up to 720 MHz/OMAP4440 operates at 1+ GHz!!
* 3.2/5MP camera with Liquid-Lens for Optical zoom. Reduces thickness and its lower on power than hardware zoom lenses!
* Video Calling Camera; not the industry vga standard either. Many users want video conference and with the Cortex A9 cpu we can have mobile iChat in 720p or close to it over wlan/HSPA+ networks.
* HSPA+ radio (triband: 850/1900/2100Mhz)!! 10-21Mbps Down/2-5Mbps Up speeds "Yeah baby Yeah"!
* INCREASED Battery Capacity and IMPROVED lower power consumption overall.
* USB 3.0 support via the 30pin connector! This doesn't sacrifice USB2.0/1.1 compatibilty

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* 512MB RAM capacity.
* Increase Storage capacities: 32GB Min/64GB Med/128GB top end/150GB premium model.
* LED on main camera please! some of us are vampires and like to take night pictures of our prey

. Seriously club parties is where this camera hurts the most.
Software/Firmware:
* SMP support and more functions/features from OS X Snow Leopard come down to the iPhone possible cause of the Cortex A9 cpu (its MUCH better than Tegra/SnapDragon hype).
* Ability to do the following:
- Run 4 application simultaneously with an opaque overlay with HOME button held for 3seconds to switch. These application of course are outside of the Calls/MMS/SMS/Push-Email operations. ONLY 1 GAME can be launched/run at a time since they consume copious amounts of power yeah!
* Save sites & documents in PDF natively.
* Call list: Green highlight hue for calls made, and Yellow for calls received. Just like they do for Missed calls in Red, squinting to see an icon to determine which calls I made and which I received is horrible. Also call during time would be nice natively (showing any conference calls as well & to which numbers and their subtimes).
* Allow apps to either record calls or block calls so long as they CLEARLY state that you MUST notify the other party before doing so or in some countries not admissable in a court-of-law.
* BETTER landscape keyboard layout. This thing is EXTREMELY accurate thus there is no need for it to be so HUGE.
There is more but I cannot think of it.