Apple has already started testing prototype units of the next generation iPhone with “select” developers. We’ve already heard that the next iPhone will most likely sport Apple’s powerful A5 processor, and 9to5Mac is reporting that the next iPhone will indeed boast the A5 chip.

The iPad 2 uses Apple’s A5 processor, and Apple is bringing the A5 to the iPhone in order to improve gaming performance. Big-name gaming companies are already testing an A5-equipped iPhone “4S” to get ready for the new device’s launch.

9to5Mac discovered that the A5 chip is coming by looking inside the iOS 4 SDK, and they’ve heard that Apple will market the speedy processor to the gaming community. The device that Apple is sending to select develepors is cleverly named the iPhone “4S,”

“The person who chose to share this information with us calls it the ‘iPhone 4S’, though the device itself only has typical Apple prototype nomenclature.  He also shared that the device spends its evenings in a safe in the company’s offices.”

To be clear: these prototype iPhone 4S devices are not necessarily the next-generation iPhone. These phones are simply prototype units for developers to get ready for the new phone, rumored to be launching in September.”

9to5Mac found the A5 information inside the SDK of the iOS version running on the prototype iPhone “4s” device. These devices run a version of iOS that supports the iPhone’s next-gen hardware.

Gaming has always been a huge market in the App Store. iOS 5 will most likely focus more heavily on gaming, and hopefully Apple will do something more with Game Center. It’s nice to see that the next iPhone will get a big step up in performance.

Do you think that the A5 chip will affect the next iPhone’s battery life? What about the name “iPhone 4s?” Hopefully Apple can come up with something better than that.