My answer to those who ask if they should wait is a resounding yes. Why? The long-winded answer to that one is below in a rumor round-up.
The design of the iPhone hasn't changed in the last two years, but that's expected to change with the next phone.
Numerous news outlets (The Wall Street Journal, 9to5Mac, iLounge, etc.) have reported that the next iPhone will have a 4- or 3.95-inch screen, as opposed to the 3.5-inch screen that has been a constant on all generations of the iPhone. From the photos, the screen makes the phone taller, though not much wider.
There's also more info out there about the screen: It will apparently use the second generation of Corning's tough Gorilla Glass, which is thinner but still just as durable. Also, The Wall Street Journal has reported that Apple has engineered a liquid crystal display with the touch screen built right into it (called in-cell technology). Currently the touch screen is a layer on top of the LCD.
New Dock Connector
The dock connector -- another major iPhone constant -- is expected to change. The dock connector or charging port on the phone is rumored to be smaller than the one on the iPhone 4S. This has been reported by a number of sources and the leaked images show a smaller port (Reuters reported that the 30-pin port would be replaced by a 19-pin connector). Additionally, the leaked photos show that the headphone jack will be relocated to the bottom of the phone.
Apple recently changed the charging port on its new MacBook Pro with Retina Display and sells adaptors so you can use old charging cables with the laptop. It's likely that Apple will do the same for the next iPhone.
The next iPhone will be faster. Some sources suggest that the phone will have an A5 processor, the same one in the new iPad. The new chip brings faster processing power and higher-end graphics. This really seems like a no-brainer, considering every iPhone has been faster than its predecessor.
Rumors of an LTE/4G iPhone have persisted for a long time, but it looks like this will finally be the year. Many believe it will use the next generation of Qualcomm chips; the head of Qualcomm told analysts in April that demand far exceeded what they expected for its upcoming chip.
Other reports, though, including one from The Independent, say that the technology was scrapped. Some have said it could have been cut because of shortened battery life.
As for battery life, there aren't any concrete rumors on the size of the battery. While all these new performance parts would use more juice, it's not likely that Apple would release a phone with less battery life than the current iPhone 4S.
Apple has confirmed a lot more about the software for the next iPhone than about the hardware. (Apple declined to comment on any of the future iPhone rumors.)
The next version of the iPhone will run iOS 6, which Apple demoed in June at its WWDC conference. The new iPhone and iPad operating system has a lot of new features, including Apple's own maps app (no more Google Maps), Facebook integration, and a new Passbook app, which collects all your passes, tickets and coupons in one app.
Which brings us to timing. The fall lasts three months, so Apple has from Sept. 22 to Dec. 21 to release its new software and phone.
Reports from the New York Times, iMore, and AllThingD all point to Apple holding an event on Sept. 12 to launch the new iPhone. iMore goes a bit farther than the others and says it will be out in stores 12 days later, on Sept. 21.
Yes, You Should Wait
"Should I get an Android phone or wait for the iPhone 5?"
That's the last question I get a lot right now. We've established that if you're in the market for an iPhone right now, you should wait. A read of the rumors above should show that it's a no-brainer.
And I also suggest waiting even if you are in the market for any smartphone. The best Android phones of the year have already been released -- the Galaxy S III and the HTC Ones are the top choices -- and they are faster than the current iPhone 4S. However, the next iPhone will level the playing field. If you've waited this long, you should continue, so that you can choose between the best smartphones on the market.