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This thing is fast. Insanely fast. And the camera is really much better. Video is also a nice touch, although in practice, having a variable-focus still camera with spot metering (!) is of much more frequent usefulness. This is clearly the best that today’s hardware can offer in such a small package with such low power needs.

In fact, I’m hard-pressed to come up with realistic additions or improvements that will be extremely compelling upgrades for next year’s presumed summer iPhone hardware update. The CPU and GPU can easily have a 2-year lifespan (like those in the original iPhone and iPhone 3G). My biggest complaint, the camera, was sufficiently fixed with good hardware and excellent software.

Let’s look at the common hardware complaint list from the original iPhone:

• EDGE only
• No real GPS
• Recessed headphone jack
• Expensive

Then the iPhone 3G came out and fixed all four, so we had to come up with something else to complain about:

• Bad camera
• No video
• Average battery life
• No A2DP, I guess… I’m really scraping the bottom here

The 3GS fixed everything except the battery life, and two of its coolest new features, the magnetometer and the speed boost, weren’t even directly requested by most people. The only remaining complaint now for next year’s iPhone to solve is:

• Average battery life

But battery life alone won’t drive a lot of upgrades. So I’m guessing that next year’s iPhone update will be minor — maybe a die shrink on the CPU/GPU or more chip consolidation to reduce power draw and make room in the case for a larger battery.

It might be used as an opportunity to announce new carrier availability. But next summer is still too early to deploy an LTE-only phone, so I’m going to go out on a limb and say that next summer’s major iPhone release will be a Verizon CDMA/EVDO version.

It’s the perfect opportunity: they don’t need to do much else to the hardware for a while, so if they were going to plan a parallel model line for a different wireless technology, this seems like the perfect time to do it. And it’s clear that Apple is trying to distance themselves from AT&T and possibly get out of exclusivity deals earlier than planned (if they’re still in them). And AT&T is clearly holding them back: want to know why we don’t yet have a front-facing camera for video chat? Because there’s absolutely no way AT&T has the network capacity for that.

Over the next year, with the $99 3G, Apple is going to saturate the U.S. GSM market — the only major reason why a lot of people don’t buy iPhones is the AT&T requirement.

To continue U.S. growth and prevent competition from running rampant, they must be on Verizon. Apple knows this, and you can be damn sure they’re going to do their best to beat the Pre there. (Imagine how different the Pre’s first year would have been if it was Verizon’s exclusive instead of Sprint’s.)

Why not wait for LTE? Simple: Apple needs a Verizon version next year, and LTE won’t be deployed well enough by then to make a high-profile device LTE-only (since it wouldn’t be able to roam or fall back to CDMA). Even with Verizon, everyone’s patron saint of network coverage and quality, large-scale technology shifts take years. I got my first EVDO phone in 2005, right when Verizon was starting to deploy EVDO on a large scale. That was 4 years ago.

Verizon users: How many years ago would you have confidently purchased an EVDO-only phone that couldn’t fall back or roam on CDMA? Would you even do it today?

Since Verizon hasn’t even begun production-level deployment of LTE yet (as far as I know), there’s absolutely no way that an LTE-only phone will be practical for at least 2-4 years. Apple can’t wait that long before making a Verizon iPhone regardless of what Tim Cook implied on that earnings call.