Next-generation iPhones likely to focus on internal improvements.
Intel Denies Atom-Powered iPhone Comments [Update]
The confusion, however, is not one of poor German-to-English translation, as the original ZDnet article clearly stated what was reported. In fact, ZDNet's original article is now linking to another account of the same event. PCGamesHardware.de confirms statements like these were made, though without direct quotes the exact interpretation of it remains up for debate (translated by Leo from Fscklog):
PCGH-Editor Daniel Waadt was there as well an can attest, that Schwaderer referred to the iPhone as an example for the use of the atom-processor from Intel. The Intel CEO mentioned furthermore, that the display on iPhone 2 would be bigger than on iPhone 1 (although it is already quite big). iPhone 2 is also thinner than iPhone 1.
Update: Golem.de claims to have also been at the talk and they did not find any iPhone-related news in his talk:
Golem.de, too, was present at last night's intel-event, however, our hardware editor - who is at AMD channel summit in Dresden right now - did not find anything related to the iPhone in Schwaderer's comment.