It looks like some developers may already be testing out Apple's latest processor on the iPhone. According to website 9to5Mac, some high-profile developers are already checking out kits that are essentially iPhone 4 units with an A5 processor rather than an A4. Dubbed the iPhone 4S by at least one developer, it's noted that these are probably not the iPhone 5, but just meant for test purposes so that developers can be prepared for when the new device launches. Still, that does tell us that the iPhone 5 will probably have the A5 processor as expected. At this point, it still remains unclear how different from the current model the new iPhone will be, but we can probably count on it looking very similar.
They are definitely pushing this one as being a powerful gaming device, according to the report, which makes sense as we've heard these types of things before. The difference with devices like the iPhone as opposed to Sony's PSP or Nintendo's DS and 3DS is that phones are pretty much a necessity no matter where you go. Being without your Nintendo DS sucks, but being without your iPhone can really slow down (even ruin, if you rely strongly on email or constant communication for work) your day. Just ask anyone who's ever been waiting at an airport without a phone. You need it almost all the time.