There seems to be a ground swell regarding the next gen iPhone, but given the recent Intel announce regarding Atom, I suspect that something else is being developed in the Apple Skunk Works. The growing popularity of the EEE PC from Asus points to a trend of ultra-mobile computing that Apple would be foolish to ignore. This trend combined with the apparent success of the Kindle point to a hand-held device based on a 7-9 inch touch screen with wireless capabilities. I think that Apple acknowledges that there are display limitations inherent in the current iPhone/Touch form factors that can be addressed by a somewhat larger form factor. Think of it as the big brother / premium version of the Touch targeted at media distribution. As well as sporting the ubiquitous music/podcast functionality, it could potentially have the following capabilities:

• act as a light weight browser application platform with integrated off-line capability (via Air or Google Gears)
• function as a truly portable e-book reader with the same functionality as Kindle with books accessible via the iTunes store through the wireless connection
• act as remote viewer for television shows and movies
• allow for wireless syncing via 802.11n / 3G wireless

In addition to the obvious advantages, it would solve the current keyboard dilemma by offering more screen real estate to display the current software keyboard. Combine this with a fuller syntax of gesture based control and you have a winner. It would fill the product niche between the Air and the Touch.

Think I'm crazy? Remember that the iPhone was in development for years before the actual launch, but the signs where there in the market. Apple had only to develop for the obvious void.