The report comes via C|Net, which fortunately for it, has no photos of the device. Last year, Gizmodo obtained the iPhone 4 which had been lost in a bar, which led to a huge FUBAR. While Gizmodo is not going to be charged in the case, Brian Hogan, 22, of Redwood City, and Sage Wallower, 28, who were earlier identified as the finder (Hogan) and go-between (Wallower) in negotiations with Gizmodo, will be.
A source "familiar with the investigation" told C|Net that the iPhone 5 was lost in late July at San Francisco's Cava 22, which is located on 22nd Street in San Francisco. Just a day or two after the phone was lost, Apple representatives contacted San Francisco police, calling the device priceless and saying that the company was desperate retrieve it safely.
Most likely using "Find My iPhone," Apple electronically traced the phone to a two-floor, single-family home in San Francisco's Bernal Heights neighborhood, the source said.
San Francisco police and Apple's own investigators visited the house, and spoke with a man, reportedly in his twenties, who acknowledged being at Cava 22 on the night the device went missing. However, he denied knowing anything about the iPhone 5, and gave gave police permission to search the house. Police found nothing, according to the source.
The source added that prior to leaving, the Apple investigators offered the man money for the iPhone 5, telling them that there would be no questions asked. Despite all this, the unnamed man continued to deny any knowledge of the iPhone 5.
Perhaps, despite the assurances of Apple employees, the man was afraid of ending up like Hogan or Wallower. Even last year, Apple stuffed the iPhone 4 inside an iPhone 3GS case, and it would be expected that the same would be true of an iPhone 5.
While it's easy to criticize the Apple employee who lost the iPhone 5, as well as Robert Gray Powell, who lost the iPhone 4 last year, they were likely field testers, who were, as part of their job, required to test the device "in the field." In addition, Apple (among other companies) will use their employees to test devices in the typical "eat your own dog food" scenario.
The iPhone 5 is expected to sport the A5 processor from the iPad 2, but there are so many rumors running around, it's unclear if the device will be minimally changed, or maximally changed.
What's clear is that based on the sheer volume of rumors, the launch is coming, and coming soon.