Steve Jobs\’s blog

BURLINGAME, CALIF. - Right about now, Steve Jobs is probably seething. The reviews of Apple’s iPhone are in, and they’re great. But Apple’s chief is known to be almost as thin-skinned as he is secretive. This diva reads his press clips, and you can bet he’s already stirring up his minions as he prepares for his next performance: iPhone 2.0.

The iPhone may go on sale this Friday, but the gadget maker has no doubt put months, maybe years, of toil into the product that could soon make the iPhone obsolete. And you can count on every flaw picked at in this week’s reviews of the iPhone from The Wall Street Journal’s Walt Mossberg or The New York Times’ David Pogue to become a creeping nightmare for the iPhone team slaving away in a windowless arm of Apple (nasdaq: AAPL - news - people ) headquarters in Cupertino, Calif.

The buzz has already begun. The trade press is reporting that a next-generation iPhone could debut at MacWorld in January. In May, a patent surfaced showing a full-screen touchpad on the reverse side of what looks like an iPod Nano. Others report that the next iPhone could come in a cubic zirconia case. The rumors can’t all be true, but using the latest reviews as a tip sheet, here’s a roundup of what we can expect:

GPS

The iPhone is a great navigation device, the Times’ Pogue argued in his review, but the phone “doesn’t know where you are.” Phones that work with global positioning satellites to do just that are already on the market. Thanks to Apple’s built-in sensors, the iPhone could do much more.

For a preview, visit Intel (nasdaq: INTC - news - people ) labs. The chip maker, an Apple supplier, is already experimenting with the idea of coupling GPS with sensors, like the ones used to adjust the screen on the iPhone depending on how a user is holding it, to allow users to fly through virtual maps by simply waving the device around.

More From Google

Meanwhile another Apple partner, Google (nasdaq: GOOG - news - people ), is working on new applications for Apple’s phones. Google CEO Eric Schmidt has been squiring around an iPhone for weeks. And it’s well known that Google has a team led by Danger co-founder Andy Rubin toiling away on a wide range of applications that will bring Google’s capabilities to all kinds of wireless devices. The obvious possibilities include versions of Google’s instant-messaging, word-processing, social-networking, and photo-sharing applications … some of which could be tailored to show off the next iPhone’s capabilities.

Faster Network

While reviewers praised the iPhone’s web browsing capabilities when paired with a zippy Wi-Fi connection to a local network, Pogue wrote that the iPhone’s pokey connection to AT&T (nyse: T - news - people ) made him “ache” for a dialup modem. Harsh.

The fix: AT&T is supplementing the EDGE network used by the iPhone with a faster one, dubbed the BroadbandConnect Network. No doubt, the next iPhone will be able to tap into this new network.

More Buttons

This is the bug that’s also a feature. The iPhone’s elegance comes, in part, from the fact that it isn’t cluttered with a cheap, chiclet-style keyboard and a confusing array of buttons. It also means, as several reviewers have noted, that users have to tap through several on-screen options just to summon a phone-style keypad. Others argued that the lack of a built in mini-keyboard means that the Blackberry from Research in Motion (nasdaq: RIMM - news - people ) will remain the weapon of choice for heavy e-mail users.

It’s unlikely Steve Jobs will abandon this distinctive feature entirely, but just as Apple has rolled out a range of computers, an iPhone equipped with some kind of keyboard could give Apple a high-end option.

Video Capture

The ability to record video is another obvious hole in the Apple iPhone’s capabilities. And it’s a bit of a puzzling one, since Apple’s video-editing software is first rate. Jobs would no doubt love to have tens of millions of iPhone users pumping movie clips into their desktop computers, where they can be edited with his company’s software.

Price

Of course, the single biggest criticism of the iPhone has been its price. And that’s also the surest sign that a new one is already in the pipeline. The real question: Will Steve Jobs introduce a higher-end phone, and slash prices on the device Apple fanatics are already lining up to buy? Or will he introduce a low-end model for those too cheap to pony up $500?

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