Due Tuesday, 10/4

It’s always fun to speculate on new Apple gadgets, and never more than when it comes to the iPhone, the latest version of which is scheduled to be released on Tuesday.

This will be new CEO Tim Cook’s first product roll-out so it has to be good to conquer any lingering doubts about his fitness for the rôle, even if the design will have been largely fixed a year ago.

Here are my guesses.

There will be not one, but two.

The old iPhone 4 will be limited to 8gB of memory and is actually the more significant, if less glamorous, of the two. It will be cheap and with the Motorola dual band comms chip will work on CDMA and GSM networks, meaning worldwide. It will be sold locked to a carrier and unlocked at a premium for markets dictating that. Why the more significant of the two? It’s the old ‘sell one to every Chinese’ argument and this will be the Third World model. 4 billion prospects and counting. All other specs will be as for the iPhone 4 available today, meaning the single core ARM A4 CPU. US price with a two year contract? $99.

The iPhone 5 will be for the developed world. Dual band comms chip, of course, a larger 4″ screen (not curved – that will be in iP 6 – there’s not enough lead time to machine these), 32 or 64gB of memory and 1gB of CPU RAM supporting the dual core ARM A5 CPU from iPad2. Thinner than iPhone 4, of course and with a proper Sony 8mp camera. This is likely to be a serious photographic tool for still and movie picture making and you will always have it with you. The iPhone is already the most used camera on Flickr. This will extend its lead. That 1gB of RAM will be required for the true WOW! feature, which will be Nuance’s Naturally Speaking voice recognition technology with the front end engineered by Siri, which Apple acquired a while back. Generic voice recognition is insanely difficult. Why do you think no one has it running locally? Apple will be the first to make it mostly work and it will run on the iPhone, not having to send your speech up to the cloud and back down, with the inevitable delays. $199/$299. With a two year contract running some $2,500, the upgrade cost is trivial for anyone out of their previous contract.

Both will come with the new iOS 5 (which will also work on all iPads), meaning a full roll out of Apple’s iCloud. Your music will all be cloned to the cloud at no cost and will magically appear on all your iOS and Mac and PC devices. Everything will (finally!) be wireless. Let’s hope it works better than MobileMe – down twice this past week. I like to think that’s in preparation for my predictions. iCloud means that the 8gB in the ‘new’ iPhone 4 will be more than adequate.

My favorite feature? Row 5, Item 4. iP6 will have a ‘sterilizes all politicians and bankers’ option,
making it the hottest seller ever.

Disclosure: Long AAPL 2012 call options.