Apple's New iPhone: What to Expect

Updated from 10:47 a.m. EDT

Apple (AAPL Quote) is widely expected to unveil a new iPhone when it hosts its Worldwide Developers Conference on Monday in San Francisco, with a special appearance from CEO Steve Jobs also likely, according to reports.

Products rumored to be debuting at the show include a cheaper model of the iPhone, as well as models with more storage featuring a better camera that can capture video, a faster processor, a magnetometer, and possibly a front-facing videochat camera.

A new $99 iPhone model is almost a certainty, according to several reports. Last week, The Financial Times reported that Apple plans to introduce a cheaper version of the iPhone at the show, citing people familiar with the initiative. The report quoted Morgan Stanley analyst Kathryn Huberty, who argued that a $50 price cut could increase demand by 50% and a $100 cut by 100%.

Also last week, TheStreet.com's Scott Moritz reported that some analysts expect a new iPhone, but not until July. Piper Jaffray's Gene Munster and Oppenheimer's Yair Reiner issued notes Thursday warning investors not to expect the new iPhone to be the centerpiece of Apple's presentation.

However, The Wall Street Journal said Friday that not only is new iPhone hardware expected Monday, but also that Steve Jobs would do the public unveiling. Jobs, a survivor of pancreatic cancer, went on medical leave in January. He had said his medical leave would run until the end of June.

If that wasn't enough, All Things Digital reporter Walt Mossberg wrote last week in his review of Palm's (PALM Quote) new Pre handset that "the new iPhone to be unveiled next week will have lots of added features."