Apple is set to introduce, we're pretty sure, the next-generation iPhone tomorrow. Leaks involving Apple devices have increased both in volume and accuracy in recent years, so we have a pretty decent idea of what to expect, at least from the flagship iPhone. Here's what we think we'll see!
The iPhone 5S
Apple releases products in what's fancifully called a "tick-tock" pattern: a big upgrade (tock), then a refinement (tick). So the iPhone 4, the first one with the glass back and the metal sides, was a "tock"--a big change from the iPhone 3GS. But the one after the iPhone 4 was the 4S--it looked exactly the same, just with some faster internals and tweaks. The iPhone 5, the current-generation iPhone, is a "tock"; it's a big change from its predecessor, bringing an aluminum back, a new 4-inch display, and a different aspect ratio. So, the next generation, which we've been thinking of as the iPhone 5S, will probably be a "tick."
Colors: One of the odder and more persistent rumors about the iPhone 5S surrounds its color. Apple has, since the iPhone 3G, offered the iPhone in two colors: white and black. But rumors, confirmed, sort of, by All Things D's sources, suggest that the 5S will come in two new colors: graphite (silver) and a gold-ish color. The latter is sort of a champagne color; I've likened it in the past to the color of an early-2000s cheapie rental car.
Internals: Apple typically upgrades its homegrown (with the help of Samsung) processor with each new iPhone. Rumors say that the as-yet-unannounced A7 processor will be 31 percent faster than the previous generation, which doesn't really mean much, but, you know, faster is better! It's also a reasonable assumption that the camera will be improved on the hardware side, since that's happened in most other "tick" updates. According to some leaked parts, the 5S may also have a dual-LED flash--though you shouldn't use flash very often.
Biometrics: Leaked packaging that may or may or accurate shows an iPhone 5S with a silver ring around the home button. It's been assumed by many that this is a biometric device--that it may be a fingerprint scanner, for security purposes. Sure, maybe! Could also just be a silver ring. Or it could be nothing because that packaging might not be real.
There have also been heavy rumors pointing to a second, cheaper iPhone, to possibly be called the iPhone 5C. This would be unusual for Apple; typically, the announcement of a new iPhone is accompanied by the lowering of the price of the previous generation. When the iPhone 5 was announced, Apple also lowered the price of the 4S, serving the dual purpose of clearing out old iPhones and offering a budget option without Apple having to actually make a budget phone.
So, the rumored 5C may or may not be similar to the 5S in internals. So how is it cheaper? Rumors suggest that the back of the 5C will be plastic, much cheaper to produce than the 5S's alleged aluminum. That CNET article linked above also suggests that a few features may be cut out to save cost, namely Siri, which would be fine with us.
The biggest news is iOS 7, but it's also not really "news," since Apple actually announced it back in June, and your techie friends may well have already installed the beta version on their phones. It's a huge change from previous software--a totally new look, flat and bold and bright where it was previously 3-D and lifelike and muted. It also works differently; there's an easy way to adjust settings, there's a new notification center (that thing you swipe down from the top of the screen) that works a little like Google Now, there's a new and improved multitasking system that works exactly like Palm's lamented WebOS, and much more. It's a foregone conclusion that iOS 7 will come on the new iPhones, but people who own older phones--the iPhone 5 and 4S, certainly--will also essentially get entirely new phones when the new software is released. Sweet!
A 5c would make sense. Since Android is currently outselling Iphone, it would make sense that they have a response, making a much cheaper phone that the 'masses' who can't afford $200 for a phone will buy. By making the 5c, they can have a cheaper build, but still have current generation statistics.