The coolest feature in Apple’s upcoming iPhone 5 may be something unexpected: a smart, voice-operated virtual assistant — simply called Assistant — that sounds like an evolutionary upgrade over the iPhone’s current voice commands.

We’ve been hearing for some time that Apple will integrate technology from Siri, a virtual assistant mobile application company it purchased last year, into the next iPhone. But new reports today from 9to5Mac and the Unofficial Apple Weblog make Assistant sound like something more than just a voice command upgrade.

It has the potential to fundamentally change the way we interact with the iPhone.

A source detailed the Assistant feature to 9to5Mac: It’s said to be accessible by holding down the iPhone’s home button for a few seconds, after which you’re presented with a speech interface that slides up from the bottom of the screen (like iOS 4’s multi-tasking interface). The interface offers up a few example commands, as well as a visual indicator of when your iPhone is ready to take voice commands.

Assistant could tap in deeply to all sorts of functions in the iPhone 5, says 9to5Mac:

For example, one can say make appointment with Mark Gurman for 7:30 PM and Assistant will create the appointment in the user’s calendar. On noting events, Assistant also allows users to set reminders for the iOS 5 Reminders application. For example, a user could say “remind me to buy milk when I arrive at the market.” Another example would be integration with the iOS Maps application. A user could ask: “how do I get to Staples Center?” and Assistant will use the user’s current location via GPS and provide directions.

Just like a real personal assistant, the iPhone 5’s Assistant will also communicate back and forth with you to confirm what it’s doing. For example, if you tell Assistant to email a friend, it may ask which specific email address to use. The phone will both speak questions like that aloud and place them inside of a text conversation.

Assistant will only be available on the iPhone 5 because it requires beefier hardware, the sources say. The source confirms previous rumors that the iPhone 5 will run Apple’s dual-core A5 chip and a hefty 1 gigabyte of RAM.

Additionally, the source says the iPhone 5 will also include Nuance dictation support, which has been rumored to appear for some time.

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