Here's my wishlist (slightly amended):
1) A proper successor to the 1520.
2) That means 5.0 to 5.5 in for the regular variant and 6.0 to 6.4 in for the "XL". It has to have a Pixelsense screen with minimal side bezels and 3:2 ratio so Panos Panay can have his notepad sized Moleskine. In fact I hope MS moves away from 16:9 and just base their phone's ratios to standard paper ratios (like the SP3 & 4). Speaking of Moleskines, It'd be cool if MS struck a partnership with them to create limited edition versions. I hope MS uses the same tech found in the Surface Book and Pro 4. Now realistically, considering how slow MS is to adopt screen tech that allows bezel reduction, a max of 2-3 mm on the sides and 1 cm top and bottom (or less). I can't imagine the requisite Iris scanning camera is at a point where it is compact enough to fit behind any bezel smaller. Sapphire glass for the screen and camera lens would also be a bonus but not a necessity.
3) It is imperative that, like the 1520, the top and bottom bezel ratios are symmetrical. Symmetry looks more premium.
4) Body construction MUST be VaporMg. The 950 and 950XL are nice and serviceable flagships as they are but, with the next flagship phone, MS must trump the iPhone in every way imaginable. It has to be a genuine iPhone killer. The current 950 series already has a magnesium chassis. It is VITAL that material appears on the outside - the surface, so to speak - as most people are shallow and, simply put, metal screams premium. Magnesium more so than any aeronautical grade Aluminum. Polycarbonate, by any other name, screams cheap plastic no matter how high their quality is and I really think MS shot themselves in the foot by insisting on using this material for SO long.
Not only may such a phone make iPhone buyers reconsider but it is important Android manufacturers have a new standard to copy and imitate in design than the iPhone. I believe MS has the capability to be that standard.
5) As far as the actual industrial design of the phone, we could start with the Continuum dock apart from the Surface line. Does anyone else find it crazy the dock is better looking and appears better made than the 950 itself? It wouldn't have taken MS much effort to produce backplates mimicking the dock for the 950s. Or they could just go full metal and create the phone equivalent of the Pro 4.
6) That leads us to the next criteria. No bright and shiny colors. They are no longer unique and they look cheap. On top of that MS's implementation of colors has been pretty monochromatic which gets old, tacky and cheap quickly. Please let us rid ourselves of this Ballmer idea. Like alot of things he did, it was so bad.
If WP users really insist on having colors I'd suggest deeper, darker subdued colors like the ones used in the Surface keyboard cover. Think burgundy, oxblood, midnight blue, etc. Some bright colors like canary yellow and cyan is acceptable. Those look tasteful and stylish and, most importantly, won't grow old very quickly with changes in fads.
Another material I'd really like to see in Windows Phones is wood. Not wood with heavy complicated grain patterns like Burled Walnut but light and simple woods like Teak, Bamboo, Zembrano, Wenge and heavily grained Elm or Eucalyptus. Something with a whiff of fragrance. If they go wood, I hope MS doesn't make the mistake of making the phones appear plasticky by overzealous application of gloss varnish. Keep it matte. Let us enjoy texture.
7) Keep the metal Windows logo on the back. I'd also like to see it slightly larger and centered. Any WP fan would like their phone to proudly say it is an MS product. More importantly, I believe the MS name actually has cache.
People here talk about how people lost interest in WP after Nokia left but I think this assessment is incorrect. Nokia was the cellphone standard back in the late 90s and early 00s but by the mid 00s and post iPhone, Nokia lost the plot and began earning a reputation for cheap looking and feeling substandard plastic phones. Nokia became a byword for cheap and that is the general feeling around the world. I can attest to this as someone who lives in a third world country: the Philippines. A lot of people here came to the conclusion "why buy a cheap shoddy Nokia when you can get a better built Samsung for little more?" I was appalled when MS partnered with Nokia and kept me from switching from Android to MS for so long. Glad I did though.
But I digress, everyone knows of the MS/Apple rivalry and the fact MS is even spoken of in the same breathe as Apple gives the name some weight (At least out here in SE Asia). The Surface Pros were a dream come true because it was MS finally realizing and capitalizing on the prestige their name carries. I feel in the US, people are coming to the same conclusion.
I'd also like to see the "Microsoft" name on the top bezel reduced in height and given a smidge more space between each character. I feel the Microsoft name needs a little bit of breathing space.
8) Custom Intel X86 processor. I think it's time to ditch ARM for the high end. It beggars belief that in spite of the long history of partnership between Intel and MS that they haven't actually tapped each other's resources to create a world beating phone that can outstrip and outclass Apple's A series chips. Seriously. Such a processor would also make Continuum a serious feature rather than a novelty. At the very least, Intel should make a dedicated coprocessor for Continuum or for Windows Hello. Either that or MS should create a miniature version of the coprocessor for they built for the Surface Book and put it in a phone.
9) That leads us to cooling. MS should retain the water cooling system they employ in the 950XL but improve upon it. They could also complement it by employing the same perimeter venting seen on the Surface tablets. I honestly think the perimeter vents have the potential to be a signature design element that Android makers might copy it.
10) Front facing speakers. The shame of WP partnering with Dolby Surround is that they failed to use it to the fullest by placing the speaker on the back where it is easily obscured. Put it on the front. HTC's Boomsound is the benchmark MS needs to exceed.
11) 4GB of RAM. I don't need to explain why.
12) Minimum storage of 64gb or 128gb + MicroSDXC expandability of up to 2TB. Make the iPhone buyers regret ever having to put up with Apple's 16GB bull****. Even if Apple moves up to 32GB in the next iPhone, their customers would still be feeling cheated. That's a good thing.
13) Return of the 41 MP camera. At this point, MS needs to go all the way. A 20 MP camera might be fine for the 950/XL but a true flagship phone needs a true flagship camera and no camera has ever matched the cache of that ludicrous Pureview. As usual, give it Zeiss lens but upgrade the OIS so it is laser assisted. A cool differentiator would be for Pureview to get a Hasselblad certified Medium Format feature. That'll give the pretentious artsy types currently on iPhones something to think about the next time they get a phone. MS should lock Hasselblad in an exclusive contract that would exclude any partnership with Apple.
14) To power it all, MS needs a battery much larger than what they are using now. Even my 1520's 3400mah battery with only a 1080p screen to power feels average. Now I am acutely aware that I was spoiled by the 1320's phenomenal battery life which was only powering a 720p screen. Nevertheless, that sort of stamina should be the goalpost for MS. I see that happening with a 4000-6000mah battery. I may be wrong though since my calculations with a 1440p screen is far from scientific.
15) User repairability. In the off chance that the phone needs to be repaired, it'd be nice to make it easy as possible by allowing the screen and all hardware components attached to it (motherboard, CPU, battery, etc be removable from the unibody VaporMg back cover. That said, I'd like to see some pantomime when they are separated.
Imagine having a hole on the bottom of the device that can be accessed via a standard sim card ejector activating muscle wires connected to microhinges which then separate the hardware from the VaporMg shell then push the hardware up by a few millimetres as if to say "I'm ready to be repaired".
It can even make a cool 'beep beep swoosh' sound while doing the operation.
Over engineering FTW!