Everyone seemed to be surprised that last year Apple came out with the 4S instead of iPhone 5. In hindsight, Apple’s releasing of the 4S was a pretty smart move and here’s why:

Any new iPhone, unless you want to pay the whole price, comes with a two-year contract, meaning anyone who bought an iPhone 4 would only be a year into their contract. The iPhone 4S comes out and attracts new customers to the base while presenting more incentive for iPhone 3GS users to upgrade.

Now, two years later, iPhone 5 comes out about the time iPhone 4 users are starting to end their contracts.

Now there is more incentive than ever for 3GS to upgrade and Apple fans on 4 are ready to purchase an iPhone 5.

So next year, no matter what the name is, I would expect only a
moderately improved phone experience, much like what we saw with 4 or 4S. Enough to get anyone on a 4 or less to bite, and so on.