KGI Securities analyst Ming-Chi Kuo believes the new chip uses ARMv8 architecture, different from ARMv7 in the A6.
Kuo says the new chip should reduce the die size by up to 22%, with the processor produced using a 28 nm manufacturing process.
The use of a better manufacturing procedure and the reduction of the die size would allow Apple to improve performance of the new chip with up to 20%, the analyst says.
Kuo also expects Cupertino to implement support for 64-bit applications with the new A7 chip, and this should enable a greater and more radical future performance.
The iPhone 5S is rumored to be unveiled by Apple on September 10, along with the iPhone 5C.