Five evolution paths for the iPhone

1. iPhone's future as a music device

We know all about the current iPhone: The iPhone 3GS, with its faster processor and video features, backed up by the iPhone 3.0 software update. Both provide justifiable reasons for excitement.

What about the iPhone's future? Apple has truly shaken up the mobile handset market over the first three generations of its smartphone, but with the company in it for the long haul, it's tempting to speculate about its intentions for the coming years.

So we have. Here are five key factors that should affect the way iPhone evolves.

Currently, Apple has a transparent policy when it comes to iPhone music apps: you're okay as long as you don't compete with the iTunes Store. Streaming apps like Last.fm and Imeem with links to buy from iTunes are fine, but no Amazon MP3, eMusic or Rhapsody.

The problem for Apple, though, is that, increasingly, streaming apps will be the competition to iTunes, in that people will be happier to stream music rather than buy it. The buzz around Spotify's plans for a streaming iPhone app that caches music so you can listen when offline reflects this trend.

Apple must decide how it fits into this beyond simply supplying the hardware. It could launch its own streaming service based on iTunes – a long-rumoured move – or it could employ a Nokia-style Comes With iTunes pricing model, letting iPhone users download unlimited tracks from the iTunes Store.

Either of these would be a logical step forward. While Apple could decide to leave the streaming apps to forge a new path for music consumption, we think this is the most unlikely option of the lot.