The iPhone will now sell with 16 gigabytes of memory and will cost $499, while the 8 gigabytes model will sell for $399. The iPod Touch is now available in a 32 GB model at $499.

"Customers who’d like to carry more music, photos, and videos with them now have new models of iPhone and iPod touch with double the memory from which to choose," Apple said in a post on its web site. The new models are available at all Apple stores immediately.

The Cupertino, Calif-based Apple also said that new models of the iPhone as well as the iPod Touch will have new software that was launched at the Macworld Conference last month. Some of the new features include an ability to edit home screen if required and also triangulate a users' position using the Maps feature.

Last month Apple announced that it had sold 4 million iPhones since its release in June last year. However analysts had estimated that a quarter of these devices were unlocked iPhones and most people were using it on networks other than AT&T.
 

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