Ok, my predictions IF Apple launch two iPhone models:
iPhone 4S:
Offered in 8 and 16GB versions.
Same design and size/ shape as current iPhone.
Re-engineered antenna.
Plastic back instead of glass.
Same gorilla glass front and retina display and screen size as current iPhone 4.
Possibly improved bluetooth.
Same 3G radio as present, HSDPA etc.
Dual core A5 system on a chip running up to 1GHZ.
512mb of ram.
Possibly improved battery life.
Sony Ericsson Exmoor R 8 megapixel camera, not sure about lens?
VGA front camera.
720p video recording.
Same home button as present.
Offered in Black and White from launch.
Launched within a week of announcement.
Will be priced lower then current model.
Hopefully it will be a lighter phone too partly thanks to a plastic back.
WiFi B,G,N 2.4ghz.
Same dock connector as present.
iPhone 5:
Offered in 16? 32 and 64GB versions
Totally new design, thinner, wider, longer, with possibly tapered tear drop design?
4" front screen Very high resolution 720P?, same screen tech as current Retina display to provide wide viewing angle and visible under sunlight display, Screen could possibly be 4.3" in size?
Gorilla glass front with a curved design (Why else did they buy those glass cutters?) with liquid metal back.
Latest bluetooth version, I think it's 3?
4G LTE possibly for US market, Worldwide 3G or 4G radio phone for rest of the market.
NFC will be included.
Dual Core A5 system on a chip up to 1.3 or 1.4ghz speed.
1GB of ram.
Elongated home button, capacitive type.
1.3 megapixel front camera.
8 megapixel or higher rear camera, no idea by who as the Exmoor R may not fit in a thinner design? Will take up to 1080p video, improved flash unit.
Bigger capacity battery.
WiFi B,G 2.4, WiFi N 2.4 and 5ghz band.
Offered in Black and White from launch.
On sale December or January?
Announced next month.
Will be priced slightly higher then the current iPhone 4.
Different dock connector designed to work with current connectors and a new Thunderbolt standard?
This is what I hope to happen also as I would be happy with the iPhone 4S with those specs, it will also offer enough of a difference between the two phones and will equally make them both as desirable to sell well.
The only sticky point is the screen resolution. Can Apple make a 4 or 4.3" screen with 720P resolution AND keep the developers happy? Some phones are coming out with 720P screens.
Also a lot of mid range to bottom of high range market phones can beat the iPhone 4 on specs, if apple make the iPhone 4S like the above and sell it at a price between the two markets it should steal sales from both.