Next-generation iPhones likely to focus on internal improvements.
Next Generation iPhones Referenced in iOS 4.3
As first noted by Engadget, the latest iOS 4.3 developer build contains model references to as-yet unreleased iPhone and iPad models. The new designations include:
For reference, the first generation iPad carries a model number of "iPad1,1" while the AT&T iPhone 4 carries the "iPhone3,1" model number. These new designations likely represent the next generation iPad and iPhone. It seems likely the second digit represents hardware differences between models -- such as a Verizon iPhone and AT&T iPhone. The iPad is also believed to be coming to both Verizon and AT&T, so that may explain at least a few of the different model numbers.
The iPad 2 is believed to be coming out in the next month or so, while the iPhone is traditionally refreshed in the summer during WWDC.