Somewhere in California some guy found an iPhone on a bar floor. The device was evidently disguised to look like an iPhone 3GS. It was inside a fake case. After removing the case, the guy knew he had something special in his hands. Gizmodo hasn't said how they coaxed it from him (they probably paid well for it), but they spent some time with it, photographed it, videoed it, and tore it apart to look at the guts. Based on everything Gizmodo found, they have the next-gen iPhone months before it is to be announced. So, what's it like?
The design is vastly different. It trades rounded edges and plastic casing for a ceramic back plate, hard aluminum edges, and a display that looks to be the same size as the current iPhone. Gizmodo says that there is a front-facing camera, better lens on the main camera, a flash for the camera.
The new iPhone uses the same micro SIM that the iPad uses rather than a regular SIM card. The display has been improved, but they were unable to determine the exact resolution. They believe it has a secondary microphone for noise cancellation. All the buttons are made of metal. It appears to be heavier, but has a 16% bigger battery.
The guy who found it said the device was running iPhone OS 4.0 -- before iPhone OS 4.0 was announced. At some point, he connected it to his PC and the device was killed, he believes remotely by Apple. That doesn't surprise me. According to Daring Fireball's Jon Gruber, Apple has indeed lost a prototype iPhone and wants it back. This could be that prototype.
What convinces Gizmodo that the device is real are the internal components. Gizmodo took it apart, and "Apple" is stamped on all the guts of the device. If it's not the real next-gen iPhone, it is the most elaborate fake ever concocted.
I suggest you head over to Gizmodo to check out all the pictures and video.