iPhone 3GS plays 1080p video, enjoys sound of jaws dropping

The iPhone is making it really hard not to like it - apparently the latest generation of iPhones - the speedy 3GS can play 1080p video. Yep, 1080p. The software is not fully ready yet but the hardware is. So, are we just a software update away from having the 3GS become one of the most popular ultra portable HD video players? The guys at Engadget spent time playing with the 3GS after reading a post in a Chinese forum that the phone handled 1080p video of up to 30Mbps bitrate. They had various success - 10Mbps 1080p video played back fine, but 20Mbps 720p was stuttering, and the audio decoder is not bug-free yet as well. HD playback is not officially supported so bugs are to be expected, the important bit here is that the hardware is capable of HD playback. A bit of googling quelled our biggest concern - will the iPhone 3GS be able to output the video after having decoded it? There are composite and component cables for the iPhone but still no HDMI cables. Nonetheless, the answer seems to be positive - component video cables are capable of handling up to 1080i/60Hz video. Okay, some quality will be lost during the progressive to interlaced conversion but the limitation to 1080i seems to be of an entirely different nature - a legal one. While video transmitted over HDMI can be DRM-protected, analog video cannot, making it easy to copy and negating the usefulness of all those content protection schemes. Still, 1080i offers great quality and 720p and 1080i content is much more common than 1080p so most of the time it's not even a problem. Of course nothing is certain until it's official, but it seems that the iPhone 3GS just might be capable of outputting HD video. And most (if not all) LCD TVs have component inputs so keep your fingers crossed.