There have been rumors of a 4K capable PlayStation 4 for a while now. According to sources at Giant Bomb, the console is very much real, and is codenamed NEO.
The main differences between the current PS4 and the NEO is the higher CPU and GPU clock speed and higher memory bandwidth. The other specifications are seemingly the same. The 8-core Jaguar CPU will be clocked ay 2.1GHz instead of 1.6GHz, the the AMD GPU gets double the compute units ay 36 at 911MHz, and the 8GB GDDR5 gets bandwidth boost from 176GB/s to 218GB/s.
Sony requires the game developers to make every game for both, the current PS4 and the NEO. The NEO will not get any special games, nor any special content of any kind, creating complete content and feature parity among both generations. Games releasing starting October this year will require to be developed for both consoles.
The games are not required to be in 4K but will feature improved visuals and improved framerates, the latter being something Sony is bullish about.
Sony will be selling the NEO alongside the current PS4, which should see a price drop and be sort of a base model. $399 seems to be the alleged price tag but we will have to wait for further clarity on that, along with release date. We expect to hear a lot more about this at E3 later this year.