For the camera, I feel that apple would do better with a 3-5 megapixel camera instead. One of the issues with smartphones is that the camera sensors are too small for their resolution and thus they rely on strong noise reduction at all ISO levels (when you zoom in at 100% you will see that with the iphone and usually worst with many other smartphones, there are noise reduction artifacts. This effectively reduces the resolution of the image, as the individual pixels are too small to capture enough light. With the iphone and all other current smartphones using tiny sensor cameras, anything above the base ISO causes a significant drop in the amount of detail captured in the image, and thus by the time the camera is at around 400-800 ISO, you effectively have a sub 2 megapixel image in terms of detail.
A lower res sensor with larger pixels will allow for higher ISO's without getting much noise, and thus while you may start at a lower megapixel count, you will have more consistent image quality, even in low light.Right now, the iphone camera as well as the ones found even in some of the flagship samsung smartphones, will offer far worst image quality than even an old 7-8 megapixel 1/2.3 inch sensor point and shoot camera, and that is because at all ISO levels, the smartphone is doing heavy noise reduction and once that sensor in the smartphone camera hits around 400 ISO, the effective detail is extremely low.
A camera is not useful indoors unless it can do at least ISO 1600 with very little noise, and sadly, no smartphone camera can do this at the moment.
Other than that, the iphone needs more RAM. 1GB is simply too low, especially if you plan to do tabbed browsing, or load large images on the web without the device complaining that the image is too big.
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