The rumors about upcoming iPhones and iPads are very straightforward this cycle compared to previous years, when lots of crazy ideas were always bandied about. Let me throw my hat in the ring and see how well I do at crystal ball prognostication, since the stakes are so low!
There are currently 18 (yes 18!) different models of iPad. This is unsustainable and causing inventory problems. At the same time, demand is so high and the iPad 2 so new that there is unlikely to be a major change in specs this holiday season.
I predict instead that Apple will streamline its models and simplify the iPad line in three ways. First, I predict that the 16GB model will be discontinued, and the 32GB model lowered in price to $499. Second, if the long-rumored “retina” high resolution iPad displays are ready to go, the 64GB model will keep its same price point but be updated with the better display. (If it isn’t ready, that model will simply receive a $100 price reduction). Third, the 3G models will switch to a new combined radio that allows them to work on either Verizon or AT&T (and possibly other carriers) without having to purchase carrier-specific models. These changes will decrease the number of models from 18 to 8 (32 and 64 GB, wifi and 3G, black and white), and hopefully relieve inventory problems.
A new iPhone 5 (or iPhone 4S, although I predict “5” to match up with the new iOS 5) is certain. It will probably contain only minor feature improvements, such as a higher resolution rear-facing camera or longer battery life, since the iPhone 4 last year introduced a major design refresh. The wildcard is what will happen on the “low-end”, where the iPod touch and iPhone may start converging more. I wonder if the time has come for a 3G iPod touch similar to the iPad, or a lower-end iPhone that is “pay as you go”. I suspect that either way the traditional hard-drive based iPod will finally be discontinued.