Apple software update aims to fix iPhone problems

SAN FRANCISCO -- Frustrated owners of Apple's iPhone get some relief this weekend: A new software update promises to fix many customer issues.

"This is a big update," Jobs told USA TODAY in an interview later. "I think people will be really happy. All these bugs have been fixed."

Apple staged the event to shine a light on new iPods. The line of music and video players has been refreshed, in part using "accelerometer" motion sensor technology first introduced on the iPhone.

The new Nano iPods ($149 and $199), the pint-size version of the bigger iPod, use a shake technique to advance to the next song. And the iPod Touch, similar to the iPhone, minus the phone, is being repositioned primarily as a gaming device. New Apple advertisements promote it as "the funnest iPod ever."

Apple has sold about 7 million revamped iPhones since July. Along with that new iPhone, Apple launched the online "App Store," where third-party vendors sell or give away software for the iPhone and iPod Touch.

Calling it "mind-blowing," Jobs said more than 100 million applications have been downloaded to date.

Gene Munster, an analyst at Piper Jaffray, said iPod sales had slowed down, compared with other Apple products. Unit sales were up 12% in the latest quarter, vs. 40% for computers.

"The iPod isn't a major growth story anymore," he said. "The moves today (are) what Apple needed to keep some momentum going."

Van Baker, an analyst with Gartner, said Apple now has "its best iPod lineup ever. There are no holes; they've got every corner covered."

TV shows in iTunes are now also available in high definition. Standard definition shows sell for $1.99; high definition for $2.99.

And NBC, which left the iTunes store in a dispute about pricing, has returned.

"NBC and Apple are both mature companies, and we had some disagreements, and now they're back with us," Jobs said. "The customers … wanted us to act like adults, so we did."