Navigation could be the killer app Apple is waiting for.
Apple knows the importance of making a splash. Their new products aren't just unveiled at massive electronics shows like some common Xoom. They get their own special launch events, and the really important ones see an introduction by Steve Jobs himself. There's value in waiting to launch until a product has something to truly differentiate itself from the last generation.
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And no, a dual-core processor is not enough to separate the iPhone 4 from the iPhone 5. That would be a cop out, and Apple tends to avoid those when it comes to design. So, if the iPhone 5 has been delayed, it makes sense that this would be due to some key new feature not being ready yet. And- having read the latest speculation, I have to think it's Maps.
Most of the great differences between iOS and Android come down to matters of personal preference. There are only really two features that Android has an objective lead in: voice recognition and navigation. Apple hasn't yet struck a deal with Nuance, so I doubt the new iPhone will brag about voice control. But maps, there's a feature sorely in need of love on the current version of iOS.
I don't think I've used Maps on my iPad 2 once for a practical purpose. Whenever I end up in the car with iPhone-owning friends, it's my Evo that we use to map out directions. There's not even an argument. Google Nav is a fantastic, free service, and there is nothing on any Apple device that remotely compares. Apple can't be happy with this state of affairs.
Now Apple bought Poly9, a 3D mapping service, in July 2010. And Apple promised in their response to the location-data-storage gaffe that they would have a crowd-sourced traffic database in the near future. Right now might be a little early for a new iOS navigation feature to get up and running...but September could be just the right time. Which is when one rumor places the launch of the iPhone.
As things stand, Apple will have a hard time following up on the iPhone 4. And, since the iPhone 4 seems to still be in full production, it doesn't look like the Cupertino-based company plans to do so any time soon. A new iPhone launching alongside a new version of iOS with a full, free navigation app would be a serious threat to every Android device scheduled for launch this holiday season. But this would require a major change in Apple's yearly pattern.
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It would also require an actual iPhone 5 delay. June hasn't rolled around yet and, as far as we know, the yearly refresh is still due at its regular time. Apple won't tell us until right before D-Day, so you can expect these rumors to keep cropping up until then.