While Palm's pre-announced Pre touchscreen smartphone is getting all the attention (some of it reportedly from Apple's legal team), rumours abound that Apple is readying a significant upgrade to its iPhone.

Apple recently released a software update to the iPhone. iPhone 2.2.1 fixed a few bugs but didn't add any major features.

However, buried deep within the code are signs that this software update is compatible with a new version of the phone.

Apple iPhone 3G duo

MacRumors explains: "Apple uses model numbers to distinguish between different hardware models. The original iPhone carries the model number of "iPhone 1,1" while the 3G iPhone is labeled "iPhone 1,2". These numbers do not change for simple storage increases and instead represent functionally different devices."

The apparently innocent 2.2.1 software update includes mention of a model "iPhone2,1".

Palm Pre review

Apple iPhone 3G review

"Rumors of the next generation iPhone point to the support of Multi-Core CPUs and possibly Multi-Core GPUs from Imagination Technologies. Apple has been building a team of chip engineers over the past year to participate in their own ARM processor designs that will presumably be used in future iPhones. Schiller previously outlined Apple's natural product timelines and acknowledged that June is the usual timeframe for major iPhone revisions, although storage increases could happen at any time," states MacRumours.

Apple recently bought 8,200,000 shares (about 4 percent) in Hertfordshire tech firm Imagination Technologies Group.

Imagination works on creating chips for embedded graphics - in particular, the PowerVR MBX graphics chip that helps run the iPhone's graphics.

In his post Macworld Expo blog, Apple expert and New York Times tech columnist David Pogue reports a chat with Apple senior vice president of worldwide product marketing Phil Schiller, in which Schiller suggested that Apple updates the iPhone in June each year...