iPhone 5S is rumored to have a 12MP camera with better low-light performance.
Apple is not on the leading edge when it comes to smart phone cameras. Nokia has taken over with their PureView technology. Apple is though continuously improving the camera with every iteration. I am actually already very pleased with the performance of the iPhone 5 camera and do not carry a point-and-shoot camera anymore. Low light is though still an issue.
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The new iPhone 5S is possibly changing that. Vietnamese Thinte reports that a source from an Apple supplier said that the iPhone 5S will have a 12MP camera with improved low-light performance.
The iPhone 5S is supposed to be going in production this quarter and ship possibly already in September.