Faster Processor
A faster processor means more powerful phone. The A6 processor compared to A5(used by iPhone 4S) and A4 (used by iPhone 4) is a lot faster with the blazing speed of 1.3 GHz with a dual-core CPU. The previous one which is A5 is only about 800 Mhz (iPhone4s) to 1 Ghz (iPad 2) which is a big difference. The SDRAM is is also a lot faster since iPhone 5 has
1GB of LPDDR2 SDRAM compared to iPhone4s which had only 512MB of LPDDR2 SDRAM.
4G LTE capable
4G LTE means a faster network connection, with this technology, mobile users will gonna have faster Internet access. Although it means that your carrier should also provide a 4G signal in able for you to utilize this technology. So there is no real use, if your country doesn't have 4G available yet.
Larger Screen
iPhone 5 has 4-inch (diagonal) Retina display with a resolution of 1136x640. While the iPhone 4 and iPhone4s has only 3.5-inch (diagonal) Retina display with a 960-by-640 resolution. That means the display of iPhone 5 is sharper and can display more information without pixelating.
Photo Credit: http://www.cnet.com
Sim Card
Yes, you have to change your phone number if you want to use an iPhone 5. Existing SIM card is not compatible with iPhone 5. It is using a "nano-SIM", while the iPhone 4, iPhone 4s and iPad is using "micro-sim". Nano-SIM is a lot smaller than micro-sim. The regular SIM size that we used to know can be cut to have a micro-sim, but unfortunately, regular sim card cannot be cut for you to convert it to a nano-sim. So you have to buy a new sim card if you will use an iPhone 5.
Photo Credit: http://www.cnet.com
Front Camera
On iPhone 4 and 4s, the front camera is just VGA camera. iPhone 5 now uses 1.2 Megapixel camera on the front, featuring a 720p (HD) video recording capability.
Photo Credit: http://www.cnet.com
Charger / Connector
The connector was trimmed down from 30-pin to 8-pin connector, called "Lightning". There is no real improvement in speed but just a mere reduction of space occupied by the connector itself. That would mean, you cannot reuse the charger/ connector you have for previous iPod Touch/ iPhone 4 (although there is an adapter that you can buy).
Photo Credit: http://www.cnet.com
EarPods
There is a new design for the earpods. With better bass quality and clean pleasant sound. It first also better in your ear. There is a built-in microphone and controls for your music player.
Photo Credit: http://www.cnet.com
New Design
iPhone 3GS and lower has a shiny metal plate on its back, then on iPhone 4 and iPhone 4S, they have a glass back which makes it seems very fragile. On iPhone 5, the aluminum metal was brought back but not with a shiny one, but with an anodized aluminum, although the top and bottom part remains a glass.
Photo Credit: http://www.cnet.com
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