Here’s how Daring Fireball‘s John Gruber sees events unfolding:

• The device code named N92 (the iPhone 4 was N90), now in being tested in-house by Apple (AAPL) engineers according to Gruber’s sources, reaches device verification test (DVT) level this fall, which is when the secret prototypes go out for field testing. (See Gizmodo here.)
• Apple unveils a new iPhone in January, perhaps at the 2011 Consumer Electronics Show, built around the CDMA protocol required to run on Verizon’s current wireless network. Lines form around the block. Apple sells millions.
• At Apple’s developers conference in June 2011, Steve Jobs introduces the iPhone 5. This is either one phone that serves both AT&T and Verizon (or better still, all four U.S. carriers), or two phones, a GSM iPhone for AT&T (T) and a CDMA iPhone for Verizon (VZ). Prices range from $199 to $299.
• In July, the new iPhones hit the streets. The iPhone 3GS is retired and the iPhone 4 sells for $99. Lines form around the block. Apple sells millions.
• Apple waits until Verizon and AT&T have more broadly deployed their LTE (long-term evolution) networks before it introduces an LTE iPhone.

Sounds plausible to me. For Gruber’s two-part series, N92 and January Jones, click here and here.

[Follow Philip Elmer-DeWitt on Twitter @philiped]