Apple is set to reveal the next iPhone today at 10:00AM PST, but rumors and reports persist that the “next” iPhone is nothing more than a minor hardware upgrade from the iPhone 4. The minor upgrade is said to be the Apple A5 processor (same processor in the iPad 2) and more RAM, noting there is nothing about a radical change in neither the phone’s screen size nor its resolution over the iPhone 4. What does this all mean?

If you consider Apple’s history, a minor upgrade in their iPhone hardware isn’t unexpected. The iPhone 3G was succeeded by the minor upgraded iPhone 3GS which is currently still selling like crazy thanks in to its $50.00 subsidized (two-year agreement) price tag.

It could that Apple believes iOS 5 coupled with an iPhone 4S will push many 3GS owners to upgrade. There are also going to be many iPhone 4 users that would ditch their phones for any iteration of the next iPhone, no matter how minuscule the update in specs.

A minor upgrade to hardware could spell trouble for Apple in the next couple of years. Google’s  Ice Cream Sandwich (ICS) is set to launch in a couple of months and if the rumored Google Nexus Prime is to be believed, Google is releasing both power and substance. The next Google OS and phone isn’t the only competition Apple has to worry about; Nokia’s first Windows Mobile phone is right around the corner.

Let’s hope Apple is releasing an iPhone 4S AND iPhone 5. The former battling it out with the low cost smartphones that Google dominates and the latter becoming the industry’s latest benchmark.