Apple set the bar for iPhone launches pretty high with the original iPhone, it's hard for people not to expect super amazing updates every time.
Apple has to be careful with any change they make, though. Screen resolution in particular, so that it doesn't have ramifications that complificate things unnecessarily for developers or suppliers.
Adding more pixels vertically is a simpler thing for them to handle than adding more pixels in both directions.
One, because there is already a way for the app's vertical screen space to shrink or expand (the double sized status bar for a call, for example, or the keyboard). So, apps that are already designed with this vertical space stretching in mind are already ready for it.
Two, because the display suppliers who are already making a 640x960 display for Apple don't have to change their process as much to produce a 640x1136 display.
If they increased the screen resolution to 720x1280, for example, they would have to change more things.
Apps would have to get redesigned to not only stretch vertically, but also horizontally. That can have a ripple effect on the user interface. Ever seen a website that takes up the whole width of the screen by anchoring things to the left and right sides? That is the easy way to do it, and that's the way a lot of Android apps do it, but it's not always the best.
Display suppliers would also need a new process if they weren't already making those panels.
Neither are huge showstoppers, but Apple would only do so if there were a very compelling reason to do it, because it forces everybody to put in more work to support the resolution.
They could still up the quality of the display (fix the gamma, make a wider gamut, correct contrast, etc.), but as far as resolution goes, I think 1136x640 is it for this go around
fury.. great info and knowing Apple most likely true..., but I like many people would like to see a little extra width in there as well.. For a company as innovative as Apple, I can't believe that can't make that happen. It seems their taking the lazy way out, something Steve J never seemed to do... For me, I'm one of those that has to have more than one phone, and like the diversity that having both a Apple and Android platform bring me and simply put, bigger in both directions is better.. You can still do this and not turn it into a brick.. I guess we'll soon see the final outcome!