Apple itself has kept exceptionally quiet (as usual) about any new features. Even so, there's plenty of information (and misinformation) as to what direction the iPhone is going in. Apple has been investing in companies and taking patents in technologies like Liquidmetal, waterproofing technology, iWallet payment systems, solar powered screens, screens with antenna technology, OLED screens, haptic feedback, 3D displays, and more. All of this shows the type of technology Apple is thinking about, it's just a question of what technology it decides to use, which device, and when.
So welcome to the wonderful world of iPhone speculation. Trying to second-guess Apple's every next move is an obsession of ours (and many other tech pundits). We've scoured the patents, analyzed the business deals, and spent a lot of time scouring some of the more remote, and potentially reliable, sources (typically those based in China that are close to the manufacture of the upcoming device). There's also we admit a fair amount of 'finger-in-the-air' guesswork, but these are the features we think you can look forward to in the next generation of iPhone.
iPhone 5: A5X or A6 CPU, Liquidmetal, and a physical redesign
It's likely that Apple is ready to introdue the new quad-core A6 CPU rather than use the A5X processor in the new iPad. Mostly because the dual-core A5 (with faster graphics) seems specifically designed to power a Retina display iPad, and would have little effect on the new iPhone. If the iPhone 5 has a faster processor it will probably be powered by a ARM quad-cortex-A9 and designed using a new 28nm process (it'll be one of the first chips in existence at 28nm - the smaller specification enables more transisters to be packed into the same space, enabling smaller and more power efficient devices, or faster CPUs in the same space). The clock speed is likely to be modest, between 1-1.5GHz (up from the 800Mhz to 1GHz of the new iPad). Although we think Apple may veer on the side of caution here. Apple has consistently upped the processing speed of the iPhone in order for it to introduce new features like multi-tasking, video recording, and Siri as well as power better and more feature-packed apps like iPhoto.