Rumors have increasingly pointed to a September 12 unveiling of Apple's yearly iPhone hardware update for 2012. Last year's iPhone 4S was a largely internal hardware update, with little visible change in the external design. This year, however, Apple is believed to be gearing up for an external restyling in addition to some rather significant (by Apple's standards, at least) hardware changes.

We decided to run down the various rumors to put together a picture of what we might expect to—and maybe what we dream might—come next month.

LTE

Support for the 4G LTE wireless standard seems like a given. The iPad already incorporates support for LTE—though it's only supported in the US and Canada for the time being. In the past, Apple has cited design compromises as the reason that the iPhone hasn't supported LTE; indeed, chips to support it have been too large and consumed too much power to integrate into the iPhone. To wit, the third-generation iPad had to actually be made thicker than the iPad 2 to increase battery capacity to account for LTE (in addition to its Retina display).

Qualcomm has been promising for some time to release next-generation baseband chips, similar to those used in the iPhone 4S, that have LTE support built-in. These chips are made on a smaller, more power-efficient process, so Apple should no longer have to compromise the iPhone design to use them. The chips were supposed to start shipping in quantity earlier this year, so Apple should hopefully have ample supply for the next iPhone.

The trickiest part about supporting LTE is that the widest network availability is still largely limited to the US. Where other deployments exist, they don't support they same frequencies. The US is still a very large market for the iPhone, despite the majority of sales coming from foreign buyers. LTE-compatible Android devices have also proliferated over the past year. Given this, Apple can't continue to ignore LTE support anymore.

At the same time, Apple will have to be very careful about its messaging on LTE support. It ran into trouble calling the LTE-compatible iPad "WiFi + 4G," particularly in Australia, where consumers complained that it didn't support LTE in their area. iPhone LTE support may be limited to the US (though there are some indications that LTE in the next iPhone may be supported in more countries). If so, Apple needs to be very clear about that.

Processor

The A5 processor in the iPhone 4S is very capable, both from a general processing and a graphics perspective. The A5X "extreme" version used in the third-generation iPad basically just has additional graphics cores to power its much higher pixel count, so we don't believe it would make a good fit for an iPhone.

However, some circumstantial evidence has pointed toward a quad-core "A6" processor being in development. Many high-end Android devices have adopted quad-core processors, so Apple may see the need to add a quad-core processor merely to keep up appearances. At the same time, the iPhone has consistently offered a user experience that often matches or exceeds that of Android on comparatively modest hardware. Apple could very well bring over the A5 to a new iPhone without any performance penalty.

If Apple can make a quad-core processor that doesn't significantly exceed the A5's current power requirements, expect it to pop up in the next iPhone. Still, we don't think this is a definite lock.

Screen

Apple is believed to be incorporating "in-cell" touch sensing into its next-generation iPhone. This technology incorporates the touch-sensing capacitors into the LCD matrix itself, eliminating the need for a separate layer for the invisible touch sensors. The benefit to the end-user is a crisper display, while the benefit to Apple is that the panel itself is thinner. This change seems very probable for September, and we can't imagine anyone would complain about having a sharper screen.

Screen size is an area where rumors have been more contentious. The screen of the iPhone has remained the same 3.5" size and 3:2 proportions since 2007. Meanwhile, Android device makers have continually pushed screen sizes ever larger, sometimes resulting in comically large devices occasionally referred to as "phablets."

The demand for a larger screen, while not necessarily universal, may be too hard to ignore. But instead of just making the iPhone bigger overall, the latest rumors suggest that Apple is making the screen larger by extending its vertical dimension. This would make the screen a 16:9 proportion, with 1136 x 640 pixels. Apparently the iPhone simulator, when used by developers to test apps in iOS 6, supports this resolution. Steve Jobs himself reportedly "worked closely" on a larger-screened iPhone, so it seems pretty close to a sure bet.

The toughest challenge for such a change lies with developers. By merely extending the vertical dimension, most apps would require little or no changes for compatibility. Vertically, apps would just have more vertical scrolling space; horizontally, things would just stretch a bit more to fill the space. Apps with custom UIs, or full-screen apps like games, would require a bit of tweaking. The amount of effort won't be zero, but we expect developers to quickly adapt.

Revised dock connector

Another more radical change is the rumor that Apple will be ditching the 30-pin dock connector for a much smaller connector. The exact number of pins this new connector will use isn't agreed upon—some have suggested as many as 19, while others have pointed to as few as eight. Regardless of the number, such a change would make some waves with accessory makers as much as it would with users. We're sure we're not the only ones with a collection of 30-pin dock connector accessories like cables, adapters, and speaker docks.

The common theory is that Apple will include or offer separately some kind of adapter so a new iPhone will work with older accessories, like it has for MagSafe 2. But many docks and other devices are made to fit snugly, so an adapter won't work in those cases. Clearly, the change is going to be inconvenient for users and accessory makers alike as a range of newer devices and cables compatible with a revised port work their way into the marketplace.

Still, we have argued that if any time is a good time for Apple to make that change, it's right now, while the company commands such a prominent presence in the mobile market. The popularity of the iPhone and iPad mean accessory markers will jump at the opportunity to make new or revised devices, so users won't likely have long to wait.

Camera

We detailed a few hardware changes Apple might incorporate into a next-generation iPhone earlier this year. Considering the resolution and size of the existing camera hardware, there isn't much Apple can do without sacrificing image quality.

However, the company may be able to go with a larger, higher-resolution sensor. Going this route means revising the lens and dedicating more space for camera hardware, but it at least is in the realm of possibility. With a suitably high resolution, Apple could also consider using alternate color filter patterns, which can result in better low-light capture or color accuracy.

Still, the iPhone camera hardware is widely considered some of the best among smartphones. So we won't be surprised if the camera hardware itself remains unchanged for a next-gen iPhone. Instead, we think it's smarter for Apple to add features to the camera software, enabling optional manual control over exposure, for instance.

"Nano" SIM

Apple was largely the party responsible for the recently adopted 4FF "nano" SIM standard approved by the European Telecommunications Standards Institute. This SIM is 40 percent smaller than the current "micro" SIMs used in the iPhone 4, iPhone 4S, and other smartphones.

The smaller size saves just a tiny bit of space relative to the size of an iPhone, but we expect Apple to adopt the standard sooner rather than later. We feel that it is likely the next-gen iPhone will use nano SIMs.

Battery

An iPhone is stuffed with its logic board, connectors, camera, and SIM among other hardware. What's left over is nothing but battery. There haven't been any radical technological advances in battery capacity, so we don't expect much change here. However, Apple has managed to squeeze a tiny bit of extra capacity into each successive iPhone. Our biggest concern is the impact of LTE support—Apple will have to do something to keep the iPhone running as long as possible, which may largely be related to improved power management techniques.

Size

Despite the rumored change in screen size, the overall dimensions of the iPhone are expected to be about the same as the current iPhone 4S. Overall the device may be slightly taller, but not significantly so (according to various parts leaks). A slightly larger device would allow room for more battery capacity, however, which as we noted above could come in handy when trying to manage support for LTE networking.

Style

The style of the next iPhone is also largely expected to be similar to the current iPhone. Alleged parts that have leaked out show a nearly identical front face, save the taller opening for the expected 16:9 screen. The outer rim still appears to be a brushed metal and likely continues to serve as an external antenna. The back looks as though it may be a composite of brushed, anodized aluminum along with plastic or glass on the top and bottom.

The power, home, and volume buttons appear to be nearly identical to current iPhone designs. As noted, the dock connector appears to be replaced with a much smaller port, allowing Apple to increase the size of the speaker and microphone grilles.

The most unusual change, we think, is the purported relocation of the headphone jack to the bottom. It seems this placement could be due to how a Dock adapter might work. The headphone jack could support analog audio signals, which are currently handled with dedicated pins on the 30-pin dock connector. It may also provide some stability for connecting to existing speaker and charging docks.

We think a lot of users will find this bottom placement bothersome and awkward, though the headphone jack is on the bottom of more than one iPod model.

If the sky were the limit

There have certainly been more radical changes mentioned in connection with a next-generation iPhone, however unlikely. For instance, Apple still has an exclusive worldwide license to use "Liquidmetal," a special amorphous metal alloy that can be molded and formed like plastic. So far the material has yet to be featured in an Apple product, but it promises to be much stronger and much lighter than, say, carved billet aluminum or Gorilla glass.

Liquidmetal certainly sounds like the future, but unfortunately we have seen no evidence to suggest that Apple has worked out all the kinks in manufacturing Liquidmetal parts. As much as we might like to see it next month, we don't see this happening in the near future.

Rumors last year suggested that Apple was experimenting with a "teardrop" shaped iPhone that mimicked the style of a MacBook Air. After Apple released the iPhone 4S, however, it was suggested that Apple was saving this more radical design for next year. The recent purported leaked parts suggest this still isn't happening.

But hey, Apple has been able to surprise us in the past. Personally, something more like the "teardrop" iPhone looks much more appealing to me than the design embodied in the parts that have leaked online.

Finally, some speculation has pointed toward Apple adopting Thunderbolt for a next-generation iPhone. None of the leaked information supports this speculation, and what we know about the technical requirements of the technology suggests it won't appear in any smartphone anytime soon.

Still, it would be great if iPhone syncing was measured in seconds instead of minutes. We are going to go out on a bit of a limb and say the next-gen iPhone could very well support USB 3.0—it isn't yet supported across all Macs, but it is backward compatible with USB 2.0.

If you could spec out the next iPhone, what would it look like? What critical features or hardware would it have? Tell us all about it in the comments.