Recycled iPhone 5 Rumors Miss the Point

Hey, did you hear ? And according to the latest rumors from 9to5Mac, it has a 4-inch screen and a new body design!

Repeat after me: Nothing to see here.

This warmed-over rumor casserole is not news. We've been through this before. All last summer, we were treated to a hysterical froth of iPhone 5 rumors before the 4S came out. It was supposed to have a 4-inch screen, a new teardrop shape, NFC, and who knows what else.

Shortly before the iPhone 4S came out, the pitch of completely inaccurate rumors got truly silly, capped by BGR's completely bogus "exclusive" that the iPhone 5 would be coming exclusively to Sprint, packing WiMAX. I know the BGR guys and they're smart, but wow, they were sold a bill of goods by a really dubious source.

Since Apple in the past quarter and is busily sucking all of the profits out of and thanks to huge subsidies those companies pay, obviously people are speculating about what's next. There's an undercurrent of nervousness, too: the next iPhone will be the first one where Steve Jobs didn't closely supervise its execution, although given the long production times of mobile phones, he almost certainly had a hand in coming up with the basic concepts involved.

So why are we seeing last year's rumors popping up as today's news? One possible explanation, with no evidence to support it whatsoever, is that the "iPhone 5" design everyone was cooing over last year has been Apple's target for the past two years, but that the company couldn't get its contracted factories to build them last year because it wasn't physically possible on existing manufacturing equipment. With another six months' worth of prep under their belt, they're trying again.

Look deeper into the current rumor and it gets even murkier: apparently there are multiple competing case designs, which tells us nothing and basically only boils down to "Apple is working on a new iPhone."

If you think Apple is not currently working on a new iPhone, you are a huge idiot.

We're months away from any new iPhone release, though, and designs and features will surely change between now and when the iPhone 5 - or whatever it's called - comes to market. Some things even change at the last minute; recall the story recently in the New York Times about how Steve Jobs switched the iPhone's screen from plastic to glass just weeks before the first model came out.

It's The Software, Not The Hardware
The success of the iPhone 4S also shows that Apple's secret sauce isn't hardware as much as software. The 4S had some industry-leading hardware features, such as a very sharp camera and a high-density screen, and it lagged in some ways, such as not including speedy 4G.

What drew consumers to the 4S - and what will draw them to the iPhone 5 - is iOS, Apple's apps, Apple's cloud services and the spectacular third-party developer community that Apple has nurtured through the industry's best app store. When I've spoken to consumers about the 4S, the feature they show the most fascination with is Siri. As the hacker community has shown by , Siri isn't really dependent on the 4S's hardware; it's a victory of software and cloud services over phone tech specs.

Yes, Apple has to keep up with the Joneses and offer a competitive hardware product. But the obsession with hardware rumors strikes me as a bit of misdirection: watch the rubes get dazzled by dreams of a 4-inch screen while Apple, the magician, is busy perfecting a cloud-based, voice-control interface where they aren't looking.

Now, that isn't to say that Apple's next innovation won't be hardware-dependent software, or a hardware-dependent service such as NFC payments. But the hardware will exist primarily to enable the software and services.

The sales failure of stock Android tablets in the North American market shows the strength of Apple's software-and-services-first strategy. (I'm pretty sure Strategy Analytics' for Android tablets over the past quarter are heavily reliant on sales in China.) Hardware can become commoditized; software expertise, generally, can't.

Many competing tablets match or exceed the iPad 2's hardware specs. The and are positively luscious pieces of hardware. But they're hobbled by the murky Android Market, where developers are having trouble getting their tablet apps to consumers, and consumers are having trouble finding them. The most successful Android tablet in North America so far, the , takes the same services-first perspective that Apple does.

Last July, I called to "." It's starting up again. This is what fills the information void left by a silent Apple, and Apple appears to be very happy to let all the babble make it the talk of the Internet.

But as we gleefully sling around our rumors, let's remember that this is all just silliness. And when a new iPhone comes to stores, its killer feature won't be whatever size screen it has: it'll be iOS.