iOS 4.1 promises to fix iPhone issues, expand gaming for new Touch

Many were expecting Apple to announce a revamped iPod lineup at its "music event" this morning. However, before tending to the MP3 players that arguably propelled the company to greatness, Apple decided to address its current cash cow, the iPhone 4. Engadget was at the event, and it has a full account of supreme overlord CEO Steven Jobs' keynote address.

Next week, iOS 4.1 will be released with purported fixes for problems with the new iPhone's Bluetooth compatibility and its proximity sensor. This OS update is also said to resolve bugs with the old iPhone 3G, which struggles mightily to run iOS 4.0 with acceptable performance. Our very own Editor in Chief has experience with all three issues, and I'm sure he'll update us on whether the new release is an improvement.

On the features front, iOS 4.1 brings support for TV rentals, HDR photography, and a new Game Center app designed specifically for multiplayer gaming. Game Center will allow users to easily invite friends to join them in multiplayer matches, and it will offer automatic matchmaking if you'd rather link up with strangers. Epic was also on hand to show off Project Sword, an "action-packed RPG adventure" that uses a version of the Unreal engine and looks very nice indeed.

Mobile gaming is becoming a big focus for Apple, particularly with the iPod Touch. According to Jobs, the Touch is Apple's best-selling iPod, and its sales eclipse those of handheld gaming systems from Nintendo and Sony combined. As one might expect, there's a new Touch based on the iPhone 4. Like the original, this fresh addition is essentially an iPhone without the phone. You get the same Retina display, A4 CPU, 3-axis gyro, and dual cameras as Apple's latest handset. The cost? $229 for an 8GB model, $299 for 32GB, and $399 for 64GB. Those prices might seem a little high considering that the 32GB iPhone 4 costs $299 and includes phone functionality. However, getting it at that price also involves signing a two-year cellular contract. The Touch requires no such commitment.

Apple's online store is already taking pre-orders for the new Touch. Shipping is free, and units are expected to start shipping next week.

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