Don’t be disappointed if Apple doesn’t announce an “iPhone 5”

Apple will unveil its new iPhone lineup Tuesday. While the buzz for months has been around an “iPhone 5,” there is a distinct possibility that Apple won’t actually announce one tomorrow — it may only reveal an upgraded version of the iPhone 4, potentially called the iPhone 4S.

If this happens — and I have no idea what’s actually going to happen — it seems that Apple observers and investors might be disappointed by this news. You mean it’s been 16 months since the iPhone 4 launched and Apple still hasn’t designed a new handset?

But that would be a short-sighted reaction. Here’s why:

• Any sort of iPhone 4S would likely have much higher performance than the current iPhone 4, including a faster processor, better camera, more memory, better graphics capabilities, faster networking, and better or similar battery life. In other words, a much better phone.
• Remember that what makes an iPhone an iPhone is mostly software. Apple’s iOS is still what matters the most, and that doesn’t need a new case design to be great.
• The iPhone 4 is still the best-selling single phone in the U.S., even more than a year after it first launched. There is nothing wrong with its look or design. The retina display is still amazing.
• In 2009, the year that the iPhone 3GS was Apple’s high-end iPhone for the holidays, it still managed to grow December quarter iPhone shipments by 100% year-over-year. And that wasn’t even a launch quarter.
• More than 90% of Americans still don’t own an iPhone. Heck, two-thirds of Americans still don’t own a smartphone. So the iPhone 4 design wouldn’t seem “old” to them. (Not any more than the Motorola RAZR that they still use.) Even existing iPhone 4 users who want more speed and a newer device would be well-served by the upgrade.
• This way, Apple could save a major iPhone 5 redesign for next year, potentially including 4G LTE compatibility and NFC support, two things I haven’t read rumored for any sort of iPhone 4S.
• And lastly, keeping the same case design may help Apple in production, so it doesn’t face any shortages this time around. Apple’s December quarter should see record iPhone demand, potentially over 25 million units. It’s important not to have any significant trouble delivering, because that’s how you lose to the competition. (Keeping the same case design may even boost — or at least help maintain — margins, too. Not the only thing that matters, but a nice bonus.)

But what about all these leaked plastic sleeve designs for some sort of new iPhone shape? Who knows. Maybe they were based on a prototype that never materialized. Maybe Apple leaked something to send the case designers off on a tangent. Maybe it’s the new iPod touch. Maybe it’s a Samsung phone. Maybe they’re real and Apple will unveil an iPhone 5 tomorrow. We’ll find out.

But no matter what, it would be silly to be disappointed by “only an iPhone 4S.” If there’s anything Apple needs to do, it’s to increase iPhone distribution in the U.S. and further differentiate itself with software and services — not just show up with a new case design.

Related: What should Apple do with the iPod?